Exam #1 Extra Credit 1. Assume that Jim and Steve both produce 2 goods-meat and potatoes. The chart below shows the amount of output that Jim and Steve can produce in a single day. Pounds of meat per day Pounds of potatoes per day Jim 5 pounds 20 pounds Steve 9 pounds 27 pounds Which producer has the absolute advantage in meat production? Which producer is better at potato production? If each producer devotes 3 days to meat production and 2 days to potato production. hovv much of each good will they produce? Jim: Steve: What are Jim and Steve's respective per-unit opportunity costs for producing meat? What are Jim and Steve's respective per-unit opportunity costs lor producing potatoes? Which producer has the comparative advantage in producing meat? Which producer has the comparative advantage in producing potatoes? Assume that each producer specializes in the good for which he has the comparative advantage. What would be the total number of pounds of meat and potatoes that will be produced? Is society able to produce morer'lessfthe same amount of meat and potatoes as before specialization? Tons of Com 2. Use the production possibilities frontier below to answer the accompanying questions. 'l 50 350 500 650 300 Tons of Wheat 3. What can be said about the combination of 800 tons of wheat and 1000 tons of corn? in. What can be said about the combination of 600 tons of corn and 350 tons oi wheat? c. What can be said about the combination of 500 tons of wheat and 200 tons oi corn? d. What is the opportunity cost of moving from point A to point D? e. What is the opportunity cost of moving lrorn point Fto point C? i. What is the per-unit opportunity cost of producing wheat for this society? g. What is the per-unit opportunity cost of producing corn for this society? h. Suppose this society was oflered a trade of 1 ton of wheat in exchange for 3 tons oi corn. Would this society benefit lrom such a trade? Why. or why not