GM545_Week 5 Homework Solutions V4

GM545_Week 5 Homework Solutions V4 - GM545 Week 5 Suggested...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
GM545 Week 5 Suggested Answers to Questions and Problems NOTE: Please pay particular attention to the way that answers are stated, because these are the kinds of statements that will be looked for in the quizzes and final exam. In general, all answers need to be supported with appropriate reasoning. CHAPTER 25 Chapter 25 Question 8 8. A country (or individual) has an absolute advantage when it can produce more of a good or service than another. A comparative advantage exists when one country’s opportunity cost to produce a good is lower than another country’s. Michelle Wie would hire you to do laundry since your opportunity cost of doing laundry is less than hers. In the 2 or 3 hours that it takes to do her laundry, she could earn far more than what she would have to pay you. Chapter 25 Question 12 12a. India in tea, Italy in olives. India’s opportunity cost for 1 million tons of olives is 15 million tons of tea. Italy’s opportunity cost for olives is 1.7 mil-lion tons of tea for 1 million tons of olives. Italy’s opportunity
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/26/2012 for the course ECON GM545 taught by Professor Gotches during the Summer '11 term at Keller Graduate School of Management.

Page1 / 2

GM545_Week 5 Homework Solutions V4 - GM545 Week 5 Suggested...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online