ps002 - Inthisexercise, theeconomyalot 1 2...

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1 How much does specialization matter? In this exercise, we would like students to think about  the conditions under which specialization can benefit  the economy a lot.   Here is what I expect you to do: 1. Modify the numbers and rework the example. 2. Modify the context.  That is, create a new example  of your own, similar to the clutch and brakes  example.      All students must do (1).  Motivated students can  do (2).   
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2 Example 2.10 . How much does specialization matter? (I) George and Tom are mechanics.  Tom can replace 15 clutches per day or 10 sets of brakes, i.e., the  opportunity cost of replacing a pair of brakes is 1.5 clutches;   George can replace 10 clutches per day or 15 sets of brakes, i.e.,  the opportunity cost of replacing a pair of brakes is 2/3 clutches. At their garage, the number of brake replacements performed each  day is the same as the number of clutch replacements.  How much more can they accomplish if they specialize than if  each performed an equal number of brake and clutch  replacements?
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ps002 - Inthisexercise, theeconomyalot 1 2...

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