EBK STUDY GUIDE FOR MANKIW'S BRIEF PRIN
7th Edition
ISBN: 8220103455329
Author: Mankiw
Publisher: CENGAGE L
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Chapter 3, Problem 3QR
To determine
Example for absolute and
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What does it mean to have an absolute advantage?
What does it mean to have a comparative advantage?
Is the following statement true or false? Please explain.
"Everyone has a comparative advantage."
Do you have an absolute or comparative advantage in doing something over someone else? Explain in a paragraph of 3 to 5 sentences.
Chapter 3 Solutions
EBK STUDY GUIDE FOR MANKIW'S BRIEF PRIN
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- What is the difference between absolute advantage and comparative advantage in decisions to trade with another country?arrow_forwardWill a country import or export products for which it has a comparative advantage? Explain.arrow_forwardSuppose a world with two persons and two goods. Is the following statement True, False, Both (True and False), or None (neither True nor False): "Each person has a comparative advantage."arrow_forward
- Suppose that each U.S. worker can produce 8 units of food or 2 units of clothing daily. In Fredonia, which has the same number of workers, each worker can produce 7 units of food or 1 unit of clothing daily. Why does the United States have an absolute advantage in both goods? Which country enjoys a comparative advantage in food? Why? please simple easy explanation with simple example to understandarrow_forwardWhat is the doctrine of comparative advantage? Provide an example of a particular country’s comparative advantage.arrow_forwardA) Which producer has the comparative advantage in producing puzzles? Geppetto or Lewis B) Which producer has the comparative advantage in producing puppets? C) If both producers decided to trade with each other to stock their toy stores, which of the following is a range of terms of trade that would benefit both Geppetto and Lewis (1 puppet = x puzzles)? Please explain to me how to solve those questions. Don't just give me the answers. Thank you so much!arrow_forward
- Assume that each person produces their his/her own food as per the table below. Each person can work for 9 hours in a day. person bread cheese wine Tina 4 /hr 3 /hr 1 /hr Eric 2 /hr 2 /hr 2 /hr Emilia 3 /hr 3 /hr 1 /hr Who has the absolute advantage for each good? Who has the comparative advantage for each good?arrow_forwardGary and Brenda both have similar businesses in the garment industry making caps and backpacks. In one day, Gary can make 60 caps and 12 backpacks when he divides his production resources equally between the two products. In one day, Brenda can produce 80 caps and 20 backpacks. Answer the following questions and show all calculations to support your answers. a. Who has the comparative advantage in producing backpacks? Explain with calculations.b. What is Brenda's opportunity cost of making a cap compared to Gary's? Explain with calculations.c. Based on your calculations in a) and b) above, who should specialize in making what if they intend to trade? Explain with calculations.d. If Gary and Brenda decide to specialize in what they do best, what would be the new production per day for each of them? Explain with calculations.e. If Gary and Brenda decide to trade, what would be the terms of trade for a backpack and how does each benefit from trading? Explain with calculations.arrow_forwardSuppose that in an hour an American worker can produce 200 clothes or 20 cars, while a Brazillian worker can produce 150 clothes or 10 cars. Each country has 8 hours available. Who has a comparative advantage in the production of clothes? Who has a comparative advantage in the production of cars? What is the opportunity cost for cars?arrow_forward
- Kate can wax 2 cars per day or wash 6 cars. Jack can wax 2 cars per day or wash 4 cars. Who has a comparative advantage in washing cars? What is the opportunity of washing cars?arrow_forwardBecause of the existence of comparative advantage, the total output of goods is higher when each producer?arrow_forwardCarlos takes 2 hours to pick a box of apples and 1 hour to make an apple pie. Son takes 4 hours to pick a box of apples and 4 hours to make an apple pie. Which of the following statements is NOT true? Carlos’s opportunity cost of making an apple pie is lower than that of Son. Carlos has a comparative advantage in making an apple pie. Son will specialize in picking apples to generate gains from trade. Son has an absolute advantage in picking apples.arrow_forward
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