Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 2, Problem 7SPA
(a)
To determine
Identify the value of the
(b)
To determine
Identify the value of the opportunity cost of producing a cap by T.
(c)
To determine
Identify the
(d)
To determine
Identify the gains from the specialization and trade.
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12. In an hour, Sue can produce 40 caps or 4 jackets
and Tessa can produce 80 caps or 4 jackets.
a. Calculate Sue's opportunity cost of producing
a cap.
b. Calculate Tessa's opportunity cost of produc-
ing a cap.
c. Who has a comparative advantage in produc-
ing caps?
d. If Sue and Tessa specialize in producing the
good in which each of them has a compara-
tive advantage, and they trade 1 jacket for
15 caps, who gains from the specialization
and trade?
A worker in country A can produce either 5 computers or 45 tons of rice, while a worker in country B canproduce either 7 computers or 42 tons of rice.
a. Graph the production possibilities curve for each country. On which point of the curve would eachcountry produce if the workers spent half of their time producing each good?
b. Which country has absolute advantage? Which country has comparative advantage? In theproduction of rise Country A absolute advantage
c. If there was trade, which country would specialize in the production of rice?
d. At what price of computers would the countries agree to trade?
6. Given that Nathan has 10 acres and can grow 15 bales of hay or 40 bushels of corn on anacre, while Simon has 10 acres and can grow 20 bales of hay or 35 bushels of corn per acre
a. What is the maximum amount of corn and hay that they can jointly produce?b. Does Nathan have a comparative advantage in growing hay?c. Does Simon have an absolute advantage in growing hay?d. What is the opportunity cost to Nathan of one bale of hay?
Chapter 2 Solutions
Macroeconomics
Ch. 2.1 - Prob. 1RQCh. 2.1 - Prob. 2RQCh. 2.1 - Prob. 3RQCh. 2.1 - Prob. 4RQCh. 2.1 - Prob. 5RQCh. 2.1 - Prob. 6RQCh. 2.2 - Prob. 1RQCh. 2.2 - Prob. 2RQCh. 2.2 - Prob. 3RQCh. 2.2 - Prob. 4RQ
Ch. 2.2 - Prob. 5RQCh. 2.3 - Prob. 1RQCh. 2.3 - Prob. 2RQCh. 2.3 - Prob. 3RQCh. 2.3 - Prob. 4RQCh. 2.3 - Prob. 5RQCh. 2.3 - Prob. 6RQCh. 2.3 - Prob. 7RQCh. 2.4 - Prob. 1RQCh. 2.4 - Prob. 2RQCh. 2.4 - Prob. 3RQCh. 2.4 - Prob. 4RQCh. 2.4 - Prob. 5RQCh. 2.4 - Prob. 6RQCh. 2.4 - Prob. 7RQCh. 2.5 - Prob. 1RQCh. 2.5 - Prob. 2RQCh. 2.5 - Prob. 3RQCh. 2 - Prob. 1SPACh. 2 - Prob. 2SPACh. 2 - Prob. 3SPACh. 2 - Prob. 4SPACh. 2 - Prob. 5SPACh. 2 - Prob. 6SPACh. 2 - Prob. 7SPACh. 2 - Prob. 8SPACh. 2 - Prob. 9SPACh. 2 - Prob. 10SPACh. 2 - Prob. 11APACh. 2 - Prob. 12APACh. 2 - Prob. 13APACh. 2 - Prob. 14APACh. 2 - Prob. 15APACh. 2 - Prob. 16APACh. 2 - Prob. 17APACh. 2 - Prob. 18APACh. 2 - Prob. 19APACh. 2 - Prob. 20APACh. 2 - Prob. 21APACh. 2 - Prob. 22APACh. 2 - Prob. 23APACh. 2 - Prob. 24APACh. 2 - Prob. 25APA
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