Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 2.1, Problem 7Q
To determine
Person St and Person Sa are better off specializing in their baking activities using the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
PA
no
Page 5
8. Pat and Kerry are considering a partnership. With all Pat's resources, Pat can produce 50 X or
20 Y. With all of Kerry's resources, Kerry can produce 30 X or 30 Y. Assume the
resources can be easily substituted to make either product. They are starting by using half
of the resources to make each item. These relationships are shown in the following table. Use
this information to answer the following questions:
Kerry
Product X
(Xylophones)
Product Y
(Yams)
50
0
Pat
25
Pat make?
10
0
20
Pat make?
30
0
15
15
0
30
a. Who has an absolute advantage in producing X? Pat
b. Who is a comparative advantage in producing Y?
Partnership
be gained from before they started trading?
c. If Pat and Kerry decided to take all the gains from trade in X, how much X would
40
25
d. If Pat and Kerry decided to take all the gains from trade in X, how much X would
Gain
be gained from before they started trading?
e. If Pat and Kerry decided to take all the gains from trade in Y, how much Y would
f.…
A popular bakery has only a few ingredients left to make their products. They could bake muffins or cookies, but they can’t make both. The bakers decide to make cookies for their customers. What is the opportunity cost of their decision?
In an eight-hour day, Andy can produce either 8 loaves of bread or 24 kilograms of
butter. In an eight-hour day, Rolfe can produce either 8 loaves of bread or 8
kilograms of butter.
At what price will trade happen?
Chapter 2 Solutions
Microeconomics
Ch. 2.1 - Prob. 1QCh. 2.1 - Prob. 2QCh. 2.1 - Prob. 3QCh. 2.1 - Prob. 4QCh. 2.1 - Prob. 5QCh. 2.1 - Prob. 6QCh. 2.1 - Prob. 7QCh. 2.1 - Prob. 8QCh. 2.1 - Prob. 9QCh. 2.1 - Prob. 10Q
Ch. 2.A - Prob. 1QECh. 2.A - Prob. 2QECh. 2.A - Prob. 3QECh. 2.A - Prob. 4QECh. 2.A - Prob. 5QECh. 2.A - Prob. 6QECh. 2.A - Prob. 7QECh. 2.A - Prob. 8QECh. 2 - Prob. 1QECh. 2 - Prob. 2QECh. 2 - Prob. 3QECh. 2 - Prob. 4QECh. 2 - Prob. 5QECh. 2 - Prob. 6QECh. 2 - Prob. 7QECh. 2 - Prob. 8QECh. 2 - Prob. 9QECh. 2 - Prob. 10QECh. 2 - Prob. 11QECh. 2 - Prob. 12QECh. 2 - Prob. 1QAPCh. 2 - Prob. 2QAPCh. 2 - Prob. 3QAPCh. 2 - Prob. 4QAPCh. 2 - Prob. 5QAPCh. 2 - Prob. 1IPCh. 2 - Prob. 2IPCh. 2 - Prob. 3IPCh. 2 - Prob. 4IPCh. 2 - Prob. 5IPCh. 2 - Prob. 6IP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Suppose there are two individuals, Casey and Rick, who live in a very simplified world where only two goods are produced and consumed; rice and beans. The production opportunity cost for Casey is 4.00kg of rice for every kilogram of beans. Rick has a production opportunity cost of 2.00 kg of rice for every kilogram of beans. Casey eventually realizes that, through trade, both individuals can be better off. Rick is willing to trade. What price can be settled between these two parties such that both individuals can enjoy more rice and beans?arrow_forwardWhat is the opportunity cost of one cake if we move from combination A to combination B?arrow_forwardRefer to Figure 3-3. If the production possibilities frontier shown for Bob is for 100 hours of production, then how long does it take Bob to make one burrito?arrow_forward
- Karan and Arjun work for a political campaign for 20 hours each per week. It takes Karan 2 hours to make a poster and 5 hours to write a memo. It takes Arjun 4 hours to make a poster and X hours to write a memo. The campaign needs 10 posters this week, and as many memos as possible. Since Karan is faster at making posters, he should be assigned the task of making posters.arrow_forwardNumber shown is incorrect. Please explain how to calculate opportunity costarrow_forwardExplain what is meant by opportunity cost of choicearrow_forward
- Which of the points are feasible and which are efficient?arrow_forwardDescribe the opportunity cost approach?arrow_forwardQUESTION 7 Olivia and Susan operate a store that sells burritos. There are two main activities: chopping up the ingredients and then cooking the fillings for the burritos. Olivia and Susan are deciding who should chop the ingredients and who should cook the fillings in order to maximise output. Olivia Susan Chopped Food (kg/hr) 15 20 Cooked Food (kg/hr) 20 30 Which of the following statements are true: For Olivia, the opportunity cost of 1kg of cooked food is 1.33kgs (to 2 decimal places) of choppectood. For Susan, the opportunity cost of 1kg of cooked food is 0.67kgs (to 2 decimal places) of chopped food. Susan should specialise in chopping. Olivia has an absolute advantage in chopping.arrow_forward
- What is the difference between opportunity cost and trade-off? Please explain.arrow_forwardIndicate True (T) or False (F) for the following questions, and explain your answer in 50 words "If a certain trade is good for one person, it can’t be good for the other one."arrow_forwardWhich of the following scenarios is not an example of a trade-off? Sarah always takes reusable tote bags to the store to carry her groceries home instead of using the plastic bags provided by the store. Sarah is happy that she can help the environment by using less plastic. In order to save money, Dave decided to use canned vegetables in his soup instead of fresh vegetables. Juan's office is two blocks away, so he walks to work every day. Roberto decided to go fishing instead of cutting the grass. The grass is now high and will take longer to cut.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education