Answers to Ch 2 Problems

Principles of Microeconomics + DiscoverEcon code card

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Answers to Problems: Chapter 2 1. In time it takes Ted to wash a car he can wax one-third of a car. So his opportunity cost of washing one car is one-third of a wax job. In the time it takes Tom to wash a car, he can wax one-half of a car. So his opportunity cost of washing one car is one-half of a wax job. Because Ted’s opportunity cost of washing a car is lower than Tom’s, Ted has a comparative advantage in washing cars. 2. In time it takes Ted to wash a car he can wax three cars. So his opportunity cost of washing one car is three wax jobs. In the time it takes Tom to wash a car, he can wax two cars. So his opportunity cost of washing one car is two wax jobs. Because Tom’s opportunity cost of washing a car is lower than Ted’s, Tom has a comparative advantage in washing cars. 3a. True: since Kyle and Toby face the same opportunity cost of producing a gallon of cider, they cannot gain from specialization and trade. 4. In time it takes Nancy to replace a set of brakes she can complete one-half of a clutch replacement.
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