1. Assume you are stranded on an island with another person. The table below gives the maximum amounts that you and the other person can produce per day, if you devote all your resources to the production of that one good. Further, assume both you and the other person face constant opportunity costs in production. Good You Other Person Food (lbs.) 30 40 Water (gallons) 90 150 a. What is the pattern of absolute advantage? In other words, who has absolute advantage in food production? In water production?

1. Assume you are stranded on an island with another person. The table below gives the maximum amounts that you and the other person can produce per day, if you devote all your resources to the production of that one good. Further, assume both you and the other person face constant opportunity costs in production. Good You Other Person Food (lbs.) 30 40 Water (gallons) 90 150 a. What is the pattern of absolute advantage? In other words, who has absolute advantage in food production? In water production?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 9RQ: In what ways (it) company investments in research and development create positive externalities?

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