1.) both have ten hours of time available. The can use their time to do one of two things: make pancakes or make hamburgers. Bob can make ten hamburgers in an hour or two pancakes in an hour. Jake can make five pancakes in an hour or one hamburger in an hour. Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake a.) Draw Bob and Jake's PPFS with hamburgers on the x-axis. Give equations for both PPFS in y=mx+b form. b.) Who has comparative advantage in the production of hamburgers? Who has comparative advantage in the production of pancakes?

1.) both have ten hours of time available. The can use their time to do one of two things: make pancakes or make hamburgers. Bob can make ten hamburgers in an hour or two pancakes in an hour. Jake can make five pancakes in an hour or one hamburger in an hour. Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake a.) Draw Bob and Jake's PPFS with hamburgers on the x-axis. Give equations for both PPFS in y=mx+b form. b.) Who has comparative advantage in the production of hamburgers? Who has comparative advantage in the production of pancakes?

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Description: 1.)both have ten hours of time available. The can use their time to do one of two things: makepancakes or make hamburgers. Bob can make ten hamburgers in an hour or two pancakes in anhour. Jake can make five pancakes in an hour or one hamburger in a

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 5PA

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2. Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have ten hours of time available. They can use their time to do one of two things: make pancakes or make hamburgers. Bob can make two hamburgers in an hour or one pancake in an hour. Jake can make three pancakes in an hour or four hamburgers in an hour. a.) Draw Bob and Jake’s PPFs with hamburgers on the x-axis. Give equations for both PPFs in y=mx+b form. b.) Can Bob and Jake both benefit from trade if the terms of trade are three pancakes per hamburger? Why or why not?
Problem 2 Consider a simple exchange economy with two people: Bob and Jake. Bob and Jake both have ten hours of time available. The can use their time to do one of two things: make pancakes or make hamburgers. Bob can make two hamburgers in an hour or one pancake in an hour. Jake can make three pancakes in an hour or two hamburgers in an hour. Use this information to answer the following questions: a.) Draw Jake and Bob's PPFS, with hamburgers on the x-axis. b.) Give equations for Jake and Bob's PPFS in y = mx+b form, still treating hamburgers as the x variable. c.) Who has absolute advantage in the production of hamburgers? Who has absolute advantage in the production of pancakes? d.) Who has comparative advantage in the production of hamburgers? Who has comparative advantage in the production of pancakes? e.) Can Bob and Jake both benefit from trade if the terms of trade are one pancake per hambruger? Why or why not?
Refer to the figure below of Mindy and Patrick's PPF's. Which of the following statements is true? Mindy Patrick 1 wallets 10 1 wallets 10 8 7 6 4 4 3 3 2+ 2 1 1+ + + + ++> 1 2 3. 4 6. 8 9 10 purses 1 2 3 4 5 6 7 8 9 10 purses Patrick has a comparative advantage in both wallets and purses. Mindy has a comparative advantage in wallets and Patrick has a comparative advantage in purses. O Patrick has a comparative advantage in wallets and Mindy has a comparative advantage in purses. Mindy has a comparative advantage in both wallets and purses.
Suppose equilibrium in the market for strawberries is disturbed by two simultaneous events: a wildfıre destroys many acres of coastal land used to plant strawberries, and blueberries (a substitute for strawberries) experience a large price increase. What would we expect to happen in the market for strawberries? The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous. The equilibrium quantity would decrease, and the equilibrium price would increase. O The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous. The equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. Both equilibrium price and equilibrium quantity would decrease.
Nettie can produce either 8 cupcakes or 4 hamburgers. Becky can produce either 4 cupcakes or 8 hamburgers. Suppose that Nettie and Becky each specialize in the production of the good for which they have a comparative advantage and decide to trade. The terms of trade are 1 cupcake for 1 hamburger. After trade, how many hamburgers will Nettie consume if Becky consumes 4 hamburgers? How many cupcakes will Becky consume if Nettie consumes 4 cupcakes? Multiple Choice Nettie consumes 4 hamburgers. Becky consumes 4 cupcakes Nettie consumes 0 hamburgers, Becky consumes O cupcakes
Amy and Bill are fixing up their house by painting walls and installing electrical outlets. In one hour, Amy can paint 8 walls, or install 6 outlets. In one hour, Bill can paint 5 walls, or install 5 outlets. a) Amy has the absolute advantage in [painting/outlets/both/neither] - Select one; while b) Bill has the absolute advantage in ]painting/ outlets/both/neither] - Select one. c) What does Amy have the comparative advantage in, if any? d) What does Bill have the comparative advantage in, if any?
Elif can produce 6 pies or 30cakes in 1 hour. Ahmet can produce 10 pies or 20 cakes in 1 hour. On the PPF lines, show what Elif produces and what Ahmet produces when they specialize. When they specialize and trade, what are the total gains from trade? If Elif and Ahmet share the total gains equally, which quantities of pies and cakes do they trade?
2. Suppose that two countries can produce wheat or cotton. If country A produces only wheat it can produce 55 units of wheat, and if it produces only cotton it can produce 35 units of cotton. If country B produces only wheat it can produce 65 units of wheat, and if it produces only cotton it can produce 45 units of cotton. Given the production possibilities curves above, which of the following would be feasible terms of trade between country A and country B? a. one unit of wheat for 0.75 unit of cotton. b. one unit of cotton for 1.5 units of wheat. c. one unit of wheat for 0.55 unit of cotton. d. one unit of cotton for 1.67 units of wheat. e. all of the above are feasible terms of trade. f. none of the above are feasible terms of trade.
John and Jack run a car washing business. In one week John can wash 36 cars or he can wax 20 cars. In one week Jack can wax 12 cars or wash 24 cars. Based on the information given, has an absolute advantage in washing cars and has a comparative advantage in washing cars. O Jack : John O John : John O John : Jack O Jack : Jack « Previous f4 f5 f6 X f7 f10 4. 5 8 9 會图 86 图
ed 13 out of an In one hour, Sue can produce 50 caps or 10 jackets and Tessa can produce 70 caps or 7 jackets. Sue's opportunity cost of producing a cap is, cost of producing a cap is. jackets. has a comparative advantage in producing caps. If Sue and Tessa each specialize in producing the good in which they have a comparative advantage and trade 1 jacket for 7 caps, then Select one: O a. 5.0/10.0/Tessa/Sue loses but Tessa gains O b. 0.2/0.10/Sue/both Sue and Tessa gain 0 c.0.2/0.10/Tessa / both Sue and Tessa gain 0 d. 0.2/0.10/Sue / Tessa gains but Sueloses e. 5.0/10.0/Sue/both Sue and Tessa gain jackets and Tessa's opportunity 47
Please draw the two graphs with explanation, thank you Suppose that in the country of England, two goods can be produced on available agricultural land: wine and wool. Suppose that the opportunity costs of production are constant, so that the PPF is a straight line. Further, when all resources are devoted to wine production, England can produce 200 (thousand) barrels. When all resources are devoted to wool production, England can produce 400 (thousand) bushels of wool. Suppose that a bushel of wool could be traded for a barrel of wine, one-for-one, on the international market. Draw a diagram illustrating the original situation, and this new situation, with wool on the X-axis and wine on the Y-axis. Meanwhile, in the country of Portugal, wool and wine can also be produced according to a linear PPF. However, when all resources are devoted to production of wine, Portugal can produce 100 barrels, but when all resources are devoted to wool production, Portugal can produce 50 bushels.…
In one day, Dahyun can produce 20 cakes or 40 brownies, and Sana can produce 25 cakes or 125 brownies. Suppose Dahyun and Sana each specialize in producing the good in which they have a comparative advantage. Select the statement that is TRUE for the following terms of trade: trade 1 cake for 7 brownies a Dahyun loses but Sana gains b Dahyun gains but Sana loses c Dahyun gains but Sana is neither better nor worse off (i.e. she is indifferent) d Both Dahyun and Sana are better off