Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider Huy and Christian who each have 8 hours available. The production possibilities for Huy and Christian are shown in the table below: it

 

Consider Huy and Christian who each have 8 hours available. The production possibilities for Huy and Christian are shown in the table below: it shows the respective amounts of exam questions or poems each can produce in 8 hours: Huy Christian Exam questions 20 15 Poems 10 5 Assume that Huy and Christian both derive positive utility from exam questions and poems. Suppose that, if Huy and Christian do not trade, each of them would spend half of the time available on each activity (that is, each spends 4 hours on producing each good). What are the total gains from specialization in the "Huy and Christian economy" if Huy and Christian specialise completely in the activity they have a comparative advantage in (and then trade with each other)? a. The gains from specialization are zero in this case. b. 2.5 exams and 2.5 poems. c. 20 exams and 10 poems. d. 5 exams and 0 poems. e. None of the above.

Step by Step Solution

3.29 Rating (155 Votes )

There are 3 Steps involved in it

Step: 1

total lator hours Now C DC table of MP Marginal productivity exam 20 of 8 15 ... 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

Advanced Accounting

Authors: Debra C. Jeter, Paul Chaney

5th Edition

1118022297, 9781118214169, 9781118022290, 1118214161, 978-1118098615

More Books

Students also viewed these Mathematics questions

Question

Factor the given expressions completely. 3ax 6ax 4 9a

Answered: 1 week ago

Question

What is meant by planning or define planning?

Answered: 1 week ago

Question

Define span of management or define span of control ?

Answered: 1 week ago

Question

What is meant by formal organisation ?

Answered: 1 week ago

Question

What is meant by staff authority ?

Answered: 1 week ago