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Waddayaknow (extra credit) August 31, 2006 Name _____Key__________________ 1) Consider the information below for the amount of two different tasks that Chris and A.J. could complete working an 8 hour day, spending all that time doing only one of the tasks. Making earrings Sewing shirts Chris 10 pairs 2 shirts A.J. 6 pairs 1 shirt ________Chris_______________ has an absolute advantage in earrings. ________Chris_______________ has an absolute advantage in shirts. _______A.J_____________________ has a comparative advantage in earrings. _______Chris_______________________has a comparative advantage in shirts. Row Method To make a pair of earrings, Chris gives up 2/10 or .2 of a shirt. To make a pair of earrings, A.J. gives up 1/6 or .167 of a shirt. \ A.J. has the lower opportunity cost to make earrings. To make a shirt, Chris gives up 5 pairs of earrings. To make a shirt, A.J. gives up 6 pairs of earrings. Chris has the lower opportunity cost to make a shirt.

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