CoSecure s digital wwnorton.com 27554 Homework 2 09/28/18 9% Part 1 (6.7 points)

Question

CoSecure s digital wwnorton.com 27554 Homework 2 09/28/18 9% Part 1 (6.7 points) 7 See Hint John and Darius can produce pickles or beets If John spends all his time making pickles, he can produce 45 pickles in a day If he spends 42 beets in a day. If Darius devotes all day to a single task, then he can either make 60 pickles or 45 beets Fill out the following table with the opportunity cost of each producer for each good.(Round to two decimal places) cost of Opportunity cost of making one beet Person making one pickle John beets pickles Darius beets pickles Part 2 (3.3 points) See Hint has the comparative advantage in making pickles has the comparative advantage in making beets. OF 11 QUESTIONS COMPLETED 0311

Explanation / Answer

Explanation:

For John:

He could either produce 45 pickels or 42 beets in a day. It means that the opportunity cost of producing 45 pickels is 42 beets.

So Opportunity cost of making 1 Pickel = 42/45 beets = 0.93 beets

Similarly,

the opportunity cost of producing 42 beer is 45 pickels.

So Opportunity cost of making 1 beer = 45/42 pickels = 1.07 pickels

For Darius:

The opportunity cost of producing 60 pickels is 45 beets.

So Opportunity cost of making 1 Pickel = 45/60 beets = 0.75 beets

Similarly,

The opportunity cost of producing 45 beets is 60 pickels.

So Opportunity cost of making 1 beet = 60/45 pickels = 1.33 pickels

As the opportunity cost of producing pickel is less for Darius (0.75<0.93)

So, Darius has the comparative advantage in making Pickels.

And as the opportunity cost of producing beets is less for John (1.07<1.33)

So, John has the comparative advantage in making beets.

Person Opportunity cost of making 1 pickel Opportunity cost of making 1 beet John 0.93 1.07 Darius 0.75 1.33

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