Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

222 a. Suppose that Thak and Bunga each split their time 50/50 in the gathering of nuts and the hunting of meat, and then consume

image text in transcribedimage text in transcribed
222 a. Suppose that Thak and Bunga each split their time 50/50 in the gathering of nuts and the hunting of meat, and then consume what they produce. How much do they each consume, and what would be the total amount of nuts and meat produced in a day? b. If Thak and Bunga each specialize according to their comparative advantage, what is the total amount that is produced in a day? c. After specialization, if Thak purchased 10 units of meat from Bunga at a rate of 1:1, how much better off are they compared to (a) where they divided their time and consumed their own production? d. Now suppose that Bunga invents a bow with an arrow, and now can catch 60 units of meat per day. Assuming they still specialize, and that the price of 1 nut is now 2 units of meat, how much better off are they if Thak wants 20 units of meat? e. Given your answer to (d), would Thak oppose Bunga inventing a bow and arrow for hunting, even though he doesn't have a comparative advantage in that activity? Australia+ 36. Suppose that a primitive economy is made up of two people (Thak and Bunga) and two goods are produced: gathered nuts and hunted meat. The table be- low shows the maximum of each output that can be produced by each person. Assume that any linear combination of these two is possible. Maximum Output per Day Nuts Meat Thak Bunga

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics Principles, Problems, And Policies

Authors: Campbell McConnell

21st Edition

1259915727, 9781259915727

More Books

Students also viewed these Economics questions

Question

1. Why do we trust one type of information more than another?

Answered: 1 week ago