Question

ECON1150 Unit 6 multiple choice assignment This assignment covers chapters 16 and 17 of your text. These are the same questions as the multiple choice assignment 6 on the quizzes page of D2L. Each correct answer is worth 1 point To receive credit for your work your answers must be submitted in D2L on the quizzes page. Even though you submit your work on the quizzes page, this is not a quiz It is suggested you print this document and when you have completed it to your satisfaction, go to the quizzes page and submit your answers. Your score will appear when you submit your work. The answers will be released one hour after the assignment closes 1. There are 2 people who work in the economy, Eric and Anastacia. Each day of work they can produce the following Anastacia-16 scarves or 4 bikes Eric - 12 scarves or 6 bikes What is the maximum of each good produced each day when applying the principle of comparative advantage? A 4 bikes and 12 scarves B 5 bikes and 14 scarves C 6 bikes and 16 scarves D. 8 bikes and 22 scarves 2. Sara and Greg's PPC is shown below. They each work 40 weeks in a year. Each week, Sara is able to produce 50 lbs. of beef and Greg is able to produce 100 lbs. of beef. Alternatively, each week Sara could produce 2 computers and Greg could produce 1 computer. If all their time is devoted to beef production, in a year how much beef will be produced? A 2,000 pounds B. 4,000 pounds C. 6,000 pounds D. 8,000 pounds

Answer 1

1)

Opportunity cost of one unit of scarves in case of Anastacia=4/16 bikes or 0.25 bikes

Opportunity cost of one unit of scarves in case of Eric=6/12 bikes or 0.50 bikes

Opportunity cost of producing scarves is lower in case of Anastacia, we can say that Anastacia has a comparative advantage in producing scarves. Anastacia should specialize in Scarves production. On specialization, Total scarves produced will be 16 as output of scarves will be zero in case of Eric.

Opportunity cost of one unit of bike in case of Anastacia=16/4 scarves or 4 scarves

Opportunity cost of one unit of bike in case of Eric=12/6 scarves or 2.00 scarves

Opportunity cost of producing bikes is lower in case of Eric, we can say that Eric has a comparative advantage in producing bikes. Eric should specialize in bike production. On specialization, Total bikes produced will be 6 as output of bikes will be zero in case of Anastacia.

Correct option is

c) 6 bikes and 16 scarves

2)

Sara's beaf production=50*40=2000 lbs

Greg's beaf production=100*40=4000 lbs

Total Production=2000+4000=6000 lbs

Correct option is

c) 6000 lbs