https://newco thtml ch.2 Suppose Sansa and Arya divide their time between making

Question

https://newco thtml ch.2 Suppose Sansa and Arya divide their time between making daggers and shields It takes Sansa 6 hours to make a dagger and 3 hours to make a shield, and it takes Arya 3 hours to make a dagger and 1 hour to make a shield Sarsa and Arya each work 30 hours a week a. What is the maximum number of daggers each can make in a week? Sansa. daggers per week Arya:daggers per week b. What is the opportunity cost to each of making a dagger? Sansa's opportunity cost of making a daggershields Arya's opportunity cost of making a daggershieds c. Who has the comparative advantage in making daggers? Arya O Sansa Neither d. Who has the absolute advantage in making daggers? OSansa O Arya O Neither 4 of 10

Explanation / Answer

A.

Sansa can produce = 30/6 = 5 daggers per week

Arya can produce = 30/3 = 10 daggers per week

B.

Sansa can produce = 30/3 = 10 shields

Arya can produce = 30/1 = 30 shields

Sansa’s opportunity cost of making dagger = 10/5 = 2 shields

Arya’s opportunity cost of making dagger = 30/10 = 3 shields

C.

Correct Answer:

Sansa

Because, Sansa has lower opportunity cost of producing daggers.

D.

Correct Answer:

Arya

Because, Arya has superior productivity level in production of daggers.

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