If Menda spends a year knitting scarves, then she can knit 12 scarves. If instead of...

   

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If Menda spends a year knitting scarves, then she can knit 12 scarves. If instead of making scarves, Menda spends a year knitting sweaters, then she can knit 2 sweaters. If Alexis spends a year knitting scarves, she can knit 10 scarves. If instead of making scarves, Alexis spends a year knitting sweaters, then she can make 5 sweaters. Both Menda and Alexis have constant opportunity costs. (a) Who has absolute advantage in knitting scarves? Why? (b) Who has comparative advantage in knitting scarves? Why? (c) With scarves on the horizontal axis and sweaters on the vertical axis, sketch the production possibilities frontier (PPF) for the economy which consists of both Menda and Alexis knitting for one year. Please be sure to label both coordinates of the point where the slope of the PPF changes. (d) Compute the slopes along the PPF. Provide an economic interpretation for both slopes. If Menda spends a year knitting scarves, then she can knit 12 scarves. If instead of making scarves, Menda spends a year knitting sweaters, then she can knit 2 sweaters. If Alexis spends a year knitting scarves, she can knit 10 scarves. If instead of making scarves, Alexis spends a year knitting sweaters, then she can make 5 sweaters. Both Menda and Alexis have constant opportunity costs. (a) Who has absolute advantage in knitting scarves? Why? (b) Who has comparative advantage in knitting scarves? Why? (c) With scarves on the horizontal axis and sweaters on the vertical axis, sketch the production possibilities frontier (PPF) for the economy which consists of both Menda and Alexis knitting for one year. Please be sure to label both coordinates of the point where the slope of the PPF changes. (d) Compute the slopes along the PPF. Provide an economic interpretation for both slopes.

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a Menda has the absolute advantage in knitting scarves because she can produce 12 scarves in a year ... View the full answer