Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN: 9781337091985
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 3, Problem 3PA
Subpart (a):
To determine
Absolute and
Subpart (b):
To determine
Comparative advantage and specialization.
Subpart (c):
To determine
Comparative advantage, specialization and price.
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Students have asked these similar questions
Jake and Jill spend their time picking apples and strawberries. The quantities they can pick in an hour are shown in the table below.
Quantity Picked in One Hour
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8
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Jill
10
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Suppose Jake specializes in picking apples, and Jill specializes in picking strawberries. If Jake and Jill then trade 3 apples for 2
strawberries, Jake will end up consuming
Suppose Jake specializes in picking apples, and Jill specializes in picking strawberries. If Jake and Jill work for one hour, then trade 3
apples for 2 strawberries, Jake will end up consuming
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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
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b)
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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 that Cassie can produce 10 pounds of tuna per hour or 20 pounds of apple per hour, and Samantha can produce 20 pounds of tuna per hour or 10 pounds of apples per hour. Cassie and Samantha both want 80 pounds of tuna and 80 pounds of apple per day.
a. How many hours must Cassie and Samantha work per day if they don't help each
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b. Suppose they decide to work together. Now how many hours each day do they have to work?What is the economic explanation for the reduction in hours?
Chapter 3 Solutions
Brief Principles of Macroeconomics (MindTap Course List)
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