Question

Question: #3. Suppose that Oscar and Felix are roommates and they want to find a way to divide up household chorescooking meals and doing laundry. It takes Oscar 45 minutes to make a meal and 90 minutes to do load of laundry. It takes Felix 60 minutes to make a meal and 60 minutes to do load of laundry.

Part1:

(a)

(Felix or oscar) has the absolute advantage in making meals.

(b)

(Felix or oscar) has the absolute advantage in doing laundry.

Part 2

(a) Oscar's opportunity cost of doing a load of laundry is(Blank)meals.

(b)Felix's opportunity cost of doing a load of laundry is(Blank)dinners.

Part 3

If Oscar and Felix want to specialize,

(a)Oscar should ( do laundry or make meals) pick one

(b)Felix should ( do laundry or make meals) pick one

Part 4

If Oscar and Felix trade, one load of laundry should trade for more than (a)(blank)meal(s) but fewer than (b) (Blank)meal(s).

#4. Suppose that Katniss and Peeta have been exiled on a deserted island. To feed themselves, they need to catch fish and hunt rabbits. The table below shows the production potential of Katniss and Peeta.If Katniss spends all her time fishing, she can catch 40 fish. If she spends all her time hunting rabbits, she can catch10rabbits. Peeta can spend all his time on fish and catch 8 fish or all his time on rabbits and catch12rabbits. Both Katnis and Peeta face a constant trade-off between catching fish and hunting rabbits

Weekly Catch

Fish Rabbits

Katniss 40 10

Peeta 8 12

Part 1: Katniss's opportunity cost for catching 1 rabbit is (Blank)fish.

Part 2: Peeta's opportunity cost for catching 1 rabbit is(Blank)fish.

Part 3: Suppose Katniss and Peeta specialize and trade. For trade to be mutually beneficial, the price of a rabbit should be more than (Blank)fish but less than(Blank)fish.

#5. Suppose we have a 2-person world, with only Stephen and his friend LeBron. Suppose that Stephen can move48boxes or bake 24cookies in an hour. Suppose that LeBron could move 20boxes or bake 5cookies in an hour. Is trade possible?

Choose one:

A.Yes, trade is possible. Stephen should make cookies while LeBron moves boxes, because Stephen has a comparative advantage in making cookies and LeBron has a comparative advantage in moving boxes.

B.Yes, trade is possible. Stephen should move boxes while LeBron makes cookies, because Stephen has a comparative advantage in moving boxes, whereas LeBron has a comparative advantage in making cookies.

C.No, trade isn't possible, because LeBron has an absolute advantage in both making cookies and moving boxes.

D.No, trade isn't possible, because Stephen has an absolute advantage in both making cookies and moving boxes.

#6.Jane andBuster both produce nuts and coffee. They each prefer to consume a diet that is half nuts and half coffee. Both have access to the same resources.

If Jane focuses on producing only coffee, she can produce 20 pounds of coffee in a week. If she only produces nuts, she can produce 40 pounds of nuts in a week.

Bustercan produce a maximum of 15 pounds of coffee in a week. He could also choose to produce only nuts, in which case he can produce 20 pounds of nuts a week.

Part 1

Who has an absolute advantage in coffee production? Who has an absolute advantage in nut production?

A.Buster has an absolute advantage in both coffee and nuts.

B.Buster has an absolute advantage in coffee, andJane has an absolute advantage in nuts.

C.Jane has an absolute advantage in both coffee and nuts.

D.Jane has an absolute advantage in coffee, andBuster has an absolute advantage in nuts.

Part 2

a. What is the opportunity cost forJane to produce one more pound of nuts?(Blank)pounds of coffee

b. What is the opportunity cost forJaneto produce one more pound of coffee?(Blank)pounds of nuts

c. What is the opportunity cost forBuster to produce one more pound of nuts?(Blank)pounds of coffee

d. What is the opportunity cost forBuster to produce one more pound of coffee?(Blank)pounds of nuts

part3.

Who has a comparative advantage in nut production? Who has a comparative advantage in coffee production?

#7A.Buster has a comparative advantage in nut production, and Jane has a comparative advantange in coffee production.

B.Buster has a comparative advantage in both coffee and nut production.

C.Jane has a comparative advantage in both coffee and nut production.

D.Jane has a comparative advantage in nut production, and Buster has a comparative advantange in coffee production.

#8.Suppose that a politician tells you about a plan to create two expensive but necessary programs forbuilding more production facilities for wind powerandstarting a program to fix bridges and highways. At the same time, the politician is unwilling to cut any other programs. Assume that all resources are already being used efficiently in other programs. The politician is trying to reach __________ on the PPF.

A.a possible point

B.an impossible point

C.an efficient point

D.an inefficient point

#9

Right now, the economy produces 30 pizzas and 140 wings (point D). Suppose that people's preferences change and they want to consume 50 pizzas. The opportunity cost of 20 more pizzas is(Blank)wings.

Suppose that people in the economy want even more pizza. Instead of 50 pizzas they want 70 pizzas. The opportunity cost of these additional 20 pizzas is(Blank)wings.

#10 Suppose a floodchangesthe production capacity in a country. How would you represent this situation with a production possibilities frontier?

A.The economy moves from a point below the PPF to a point on the PPF.

B.The economy moves from a point on the PPF to a point beyond the PPF.

C.The entire PPF shifts out.

D.The entire PPF shifts in.