Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Mary produces both hats and apple pies:

• If Mary utilizes all her resources to produce hats, she could produce 48 hats an hour.

• If she utilizes all her resources to produce apple pies, she could make 24 apple pies an hour.

Bill produces both hats and apple pies.

• If Bill utilizes all his resources to produce hats, he could produce 24 hats an hour.

• If he utilizes all his resources to produce apple pies, he could make 48 apple pies an hour.

To complete this assignment, you must answer all of the following problems and complete all of the following activities:

1. Construct Mary’s production possibilities frontier and Bill’s production possibilities frontier. Plot hats on vertical axis.

2. What is Mary’s opportunity cost of producing one apple pie?

3. What is Mary’s opportunity cost of producing one hat?

4. What is Bill’s opportunity cost of producing one apple pie?

5. What is Bill’s opportunity cost of producing one hat?

6. In which of the two activities does Mary have a comparative advantage? In which of the two activities does Bill have a comparative advantage? Describe your reasoning.

7. Assume Mary and Bill are each producing 16 apple pies and 16 hats. Indicate this point on the production possibilities diagram.

8. Let Mary and Bill specialize in what they each have a comparative advantage in. Point out these two points on your production possibilities diagram. What has happened to the total amount of hats and apple pies being produced? Describe why this happened.

9. Suppose that both parties specialize in producing the good in which they have a comparative advantage. If Mary and Bill are willing to trade at a rate of one hat for one apple pie, and make a trade of 24 hats for 24 apple pies, show on your production possibilities diagram that both Mary and Bill could get outside of their individual production possibilities frontier. Why does this mean that both Mary and Bill are better off?

10. Use Mary’s opportunity costs and Bill’s opportunity costs to describe why the terms of trade of one hat for one apple pie was a good terms of trade for both of them.

11. Suppose that both parties specialize in producing the good in which they have a comparative advantage. Will two hats for one apple pie be a good terms of trade for both Mary and Bill? Describe why or why not.

12. Suppose that both parties specialize in producing the good in which they have a comparative advantage. Use Mary’s opportunity costs and Bill’s opportunity costs to determine a range for the terms of trade that will be good for both Mary and Bill.

13. If Mary and Bill were Nation A and Nation B instead, the same principles of comparative advantage, specialization, and the benefits of trade would apply. If nations specialize in an area of comparative advantage and then trade with other nations who have specialized in areas of their comparative advantage, what would occur to the wealth of the trading nations? What can happen to the standard of living of the citizens of the nations? Why?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91708

Have any Question? 


Related Questions in Microeconomics

Assignmentyou will submit your second comprehensive summary

Assignment You will submit your second comprehensive summary (4-5 pages) regarding your final progress report. If you are still in your original business, what lessons did you learn? If not, what went wrong? What improve ...

Assignmentvirtually all general managers face

Assignment Virtually all general managers face capital-budgeting decisions in the course of their careers. The most common of these is the simple "yes" versus "no" choice about a capital investment. Regardless of the typ ...

Essay questionyour manager knows that you have completed a

Essay Question Your manager knows that you have completed a course in Purchasing and Materials Management. Your manager would like you to write an essay for your fellow workers about the key purchasing/ supply management ...

Assignmentscenario summarya kansas city based supplier of

Assignment Scenario Summary A Kansas City based supplier of health care information technology (HCIT) solutions has recently hired you as a Human Resource Manager. You are in charge of hiring new medical consultants for ...

Assignmentin this assignment you will discuss the role of

Assignment In this assignment, you will discuss the role of entrepreneurship in improving the economic condition of countries and individuals and understand the manner in which this perception has spread around the world ...

Short answer amp essay questionsyou must complete two short

Short Answer & Essay Questions You must complete two Short answer questions and one Essay question All answers must be in the form of a paragraph (minimum of 5 sentences per paragraph). Please select from below: Short An ...

Assignment production cost analysis and estimation applied

Assignment: Production Cost Analysis and Estimation Applied Problems Please complete the following two applied problems: Problem 1: William is the owner of a small pizza shop and is thinking of increasing products and lo ...

Assignment 1 -i watch the videos on demand and supplythere

Assignment 1 - I) Watch the videos on Demand and Supply There are 5 changes in Demand that shift the demand curve to the right or left.  They are Change in Tastes and Preferences Change in Income Change in Population Cha ...

Assignmentin this assignment you must break a norm this

Assignment In this assignment, you must break a norm. This breach must be done in a public forum. You will be writing an essay about your experiment, in which you must be sure to answer all of the questions listed in thi ...

Assignmentwhat are the two distinguishing properties of a

Assignment What are the two distinguishing properties of a public good? Explain each in one or two sentences. Give an example of a public good different from any of the examples in your text or my notes. What is the "fre ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen