In the neighboring groups of New Yorkers and New Jersians, each produces only two products, bagels and

Question:

In the neighboring groups of New Yorkers and New Jersians, each produces only two products, bagels and calzones. By themselves, the New Yorkers, each day, can produce either 45 pounds of bagels and no calzones, or 30 pounds of calzones and no bagels, or any combination in between. The New Jersians, by themselves, each day, can produce 30 pounds of bagels and no calzones, or 28 pounds of calzones and no bagels, or any combination in between. Diagram 1.a. shows the daily Production Possibility Frontier for the New Yorkers and Diagram 1.b. shows the daily Production Possibility Frontier for the New Jersians.

Diagram 1.a. - New Yorkers' Production 350, 30 30 25 15, 18 20 25, 12 15 35, 6 10 5. 45, 0 10 15 20 25 30 35 40 45 50 Ba

a. Examine diagram 1.a. showing the daily Production Possibility Frontier for the New Yorkers and diagram 1.b. showing the daily Production Possibility Frontier for the New Jersians. Which group has the absolute advantage in bagels production? Show your calculations and explain why.
b. Examine diagram 1.a. showing the daily Production Possibility Frontier for the New Yorkers and diagram 1.b. showing the daily Production Possibility Frontier for the New Jersians. Which group has the absolute advantage in calzones production? Show your calculations and explain why.
c. Examine diagram 1.a. showing the daily Production Possibility Frontier for the New Yorkers and diagram 1.b. showing the daily Production Possibility Frontier for the New Jersians. Which group has the comparative advantage in calzones production? Show your calculations and explain why.
d. Examine diagram 1.a. showing the daily Production Possibility Frontier for the New Yorkers and diagram 1.b. showing the daily Production Possibility Frontier for the New Jersians. Which group has the comparative advantage in bagels production? Show your calculations and explain why.
Later, the New Yorkers discover a new technology for making calzones that dramatically increases the quantity of calzones they can produce each day. Diagram 1.c. shows both the old and the new daily production possibility frontier for the New Yorkers. The New Yorkers, each day, can now produce either 50 pounds of bagels and no calzones, or 50 pounds of calzones and no bagels, or any combination in between. Diagram 1.c. shows both the old and the new daily Production Possibility Frontiers for the New Yorkers and Diagram 1.b. shows the unchanged daily Production Possibility Frontier for the New Jersians.

Diagram 1.b. - New Jersians Production 0, 28 30 25 7.5,21 15,14 15 22.5, 7 10 30,0 10 15 20 25 30 Bagels Diagram 1.c.- N

e. Examine diagram 1.c. showing both the old and the new daily Production Possibility Frontier for the New Yorkers and diagram 1.b. showing the daily Production Possibility Frontier for the New Jersians. Which group NOW has the absolute advantage in bagels production? Show your calculations and explain why.
f. Examine diagram 1.c. showing both old and the new daily Production Possibility Frontier for the New Yorkers and diagram 1.b. showing the daily Production Possibility Frontier for the New Jersians. Which group NOW has the absolute advantage in calzones production? Show your calculations and explain why.
g. Examine diagram 1.c. showing both the old and the new daily Production Possibility Frontier for the New Yorkers and diagram 1.b. showing the daily Production Possibility Frontier for the New Jersians. Which group NOW has the comparative advantage in bagels production? Show your calculations and explain why this is important.
h. Examine diagram 1.c. showing both old and the new daily Production Possibility Frontier for the New Yorkers and diagram 1.b. showing the daily Production Possibility Frontier for the New Jersians. Which group NOW has the comparative advantage in calzones production? Show your calculations and explain why this is important.