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chapter 2 microeconomics

# chapter 2 microeconomics - Steve Siegel Chapter 2 Homework...

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Steve Siegel 2/5/2008 Chapter 2 Homework 2.2. Ted’s opportunity cost of washing a car= 3 wax jobs Tom’s opportunity cost of washing a car= 2 wax jobs Therefore because Tom’s opportunity cost of a washing a car is lower than Ted’s, Tom has comparative advantage over Ted. 2.4. O.C. to replace a clutch for Nancy= 2 pairs of brakes O.C. to replace a set of brakes for Nancy= ½ of a clutch O.C. to replace a clutch for Bill= 3 sets of brakes O.C. to replace a set of brakes for Bill= 1/3 of a clutch Therefore because the opportunity cost to replace the clutch is less for Nancy she has comparative advantage. Inversely Bill has comparative advantage for replacing breaks over Nancy. Nancy has absolute advantage over Bill for replacing the clutch, because she can do the task overall in less time 2.6. a) Unattainable b) Efficient and attainable c) Attainable and inefficient 2.8. An increase in productivity of dresses would not only increase the amount of dresses produced but also the amount of loaves of bread per day. According to the PPC her

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chapter 2 microeconomics - Steve Siegel Chapter 2 Homework...

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