8 In an hour, Sue can produce 40 caps or 4 jackets and Tessa can produce 80

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8 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 producing a cap.

c Who has a comparative advantage in producing caps?

d If Sue and Tessa specialise and then trade 1 jacket for 15 caps, who gains from the specialisation and trade?

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Economics

ISBN: 9781118150122

10th European Edition

Authors: Michael Parkin, Dr Melanie Powell, Prof Kent Matthews

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Question Posted: Nov 06, 2024 01:00 AM

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8 In an hour, Sue can produce 40 caps or 4 jackets and Tessa can produce 80

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Economics

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