Answer to Question #102627 in Microeconomics for Marcos

Question

Answer the question and show your reasoning. HINT: use your understanding of opportunity costs as an aide in answering each question.

1. Using the data in the book, suppose now that Gilligan takes only half an hour to pick a cup of berries and 15 minutes catch a fish. Who has a comparative advantage in berry picking? Who has a comparative advantage in catching fish?



2. Suppose Gilligan and Maryanne had not yet met. Each spent 6 hours a day picking berries and 6 hours per day catching fish. Using the book example, how much fish and how many cups of berries would they produce? What is the result after they meet and specialize according to comparative advantage?

Answer 1

1. We need to know the data for another person to calculate who has a comparative advantage in berry picking and in catching fish.

2. The result will be better and output higher after they meet and specialize according to comparative advantage, but we can't calculate the exact result without additional data.