LeBron James is extremely tall and athletic and, therefore, can clean his house faster than any other one person. However, whenever he spends time cleaning his house he gives up hundreds of thousands of dollars in foregone earnings and so he hires a cleaning service to clean his house for him. Which of the following economic principles does this best reflect? the exchange maximum principle the law of absolute advantage the law of comparative advantage this violates all basic economic principles, you should never hire someone to do something that you can do for yourself

If country A uses all of its resources efficiently, it can produce a maximum of 100 units of good X.  If country A uses all of its resources efficiently, it can produce a maximum of 150 units of good Y. If country B uses all of its resources efficiently, it can produce a maximum of 75 units of good X.  If country B uses all of its resources efficiently, it can produce a maximum of 125 units of good Y.  Both countries have (linear) straight line PPFs.    What is the opportunity cost of producing 10 units of X in country A?  (hint: your answer should be measured in the positive number of units of good Y that must be given up - round your answer to two decimal places only if necessary)

Diego and Kris are roommates. They spend most of their time studying, but they leave some time for their favorite activities: making pizza and brewing root beer. Diego takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Kris takes 6 hours to brew a gallon of root beer and 4hours to make a pizza. a) What is each roommate's opportunity cost of making a pizza? Who has the absolute advantage in making pizza? Who has the comparative advantage in making pizza? b) If Diego and Kris trade foods with each other, who will trade away pizza in exchange for root beer? c) The price of pizza can be expressed in terms of gallons of root beer, what is the highest price at which pizza can be traded that would make both roommates better off? What is the lowest price? Why?

Suppose there exist two imaginary countries, Congaree and Yosemite. Their labor forces are each capable of supplying four million hours per week that can be used to produce almonds, shorts, or some combination of the two. The following table shows the amount of almonds or shorts that can be produced by one hour of labor.

Which of the following statements concerning location economies is FALSE? Explain Why? 1. Companies must determine where to sell and where to produce. 2.The Internet is an industry where companies must locate facilities near their foreign customers, so decisions on market and production location are connected. (difficult, page 382) 3.Companies may have excess production capacity already in place that will influence their ability to serve markets in different countries. 4. The process of determining an overall geographic strategy must be flexible because country conditions change

When a country has a comparative advantage in the production of a good, it means that it can produce this good at a lower opportunity cost than its trading partner. Then the country will specialize in the production of this good and trade it for other goods. The following graphs show the production possibilities frontiers (PPFs) for Glacier and Rainier. Both countries produce corn and basil, each initially (i.e., before specialization and trade) producing 18 million pounds of corn and 9 million pounds of basil, as indicated by the grey stars marked with the letter A. BASIL (Millions of pounds) 48 42 36 30 24 18 12 6 0 0 PPF 6 Glacier A 12 18 24 30 36 CORN (Millions of pounds) 42 48 ? BASIL (Millions of pounds) 48 42 36 30 24 18 12 6 0 0 PPF I + 6 Rainier 12 18 24 30 36 CORN (Millions of pounds) I 42 48 (?) Glacier has a comparative advantage in the production of while Rainier has a comparative advantage in the production of Suppose that Glacier and Rainier specialize in the production…

Alice and Bob each produce haircuts and landscaping services.  Alice can provide 4 haircuts in one hour.  Bob can provide 2 haircuts in one hour.  It takes Alice 2 hours to landscape an acre of property.  It takes Bob 1 hour to landscape an acre of property.  Assume Alice and Bob both work a standard 8 hour day.  If Alice and Bob were to combine forces and open their business "Heads and Hedges" together, how should Alice and Bob allocate their time to maximize the gains from trade with one another? (check all that apply) Alice should only spend her time cutting hair. Bob should only spend his time cutting hair. Bob should only spend his time landscaping. Alice should only spend her time landscaping.

Suppose you have a team of two workers: one is a baker and one is a chef. Your baker is talented but is inexperienced. Your chef is not only an elite chef but is also faster at baking. If your kitchen specialized according to absolute advantage, who would do the cooking? Who would do the baking? If your kitchen specialized according to comparative advantage, who would do the cooking? Who would do the baking? Which approach above is more efficient? Explain your answer.

When a country specializes in the production of a good, this means that it can produce this good at a lower opportunity cost than its trading partner. Because of this comparative advantage, both countries benefit when they specialize and trade with each other. The following graphs show the production possibilities frontiers (PPFS) for Maldonia and Lamponia. Both countries produce lemons and sugar, each initially (i.e., before specialization and trade) producing 24 million pounds of lemons and 12 million pounds of sugar, as indicated by the grey stars marked with the letter A. (? (?) Maldonia Lamponia 64 64 56 56 48 PPF 48 40 40 32 32 24 24 PPF 16 16 16 24 32 40 48 56 64 16 24 32 40 48 56 64 LEMONS (Millions of pounds) LEMONS (Millions of pounds) Maldonia has a comparative advantage in the production of production of while Lamponia has a comparative advantage in the . Suppose that Maldonia and Lamponia specialize in the production of the goods in which each has a comparative advantage.…

Please write your answers on a piece of paper. Your answers should be handwritten. Upload your answers as an attachment to the system. Firm A can produce 6 tables and 3 chairs in a day. Firm B can produce 8 tables and 2 chairs. Write your answers on a piece of paper and upload on the E-Learning system. a) Find the firms that have absolute advantage in producing tables and chairs. Discuss briefly. b) To maximize total production, which firms should produce which product? Analyze using comparative advantage concept. Show your calculations. Draw the production possibility frontier.