Suppose that the amount of time required for the electrician or the carpenter to complete a job of rewiring or paneling is given by the following table:

a. Compute the costs of performing each of these tasks for each individual.
b. Who has the comparative advantage at rewiring? At paneling?
c. Suppose that the more efficient rewirer does all of the rewiring and the more efficient paneler does all of the paneling. Does this trade benefit the electrician? Does it benefit the carpenter?
d. Suppose that a different trade is worked out whereby the electrician rewires the carpenter's entire house in exchange for the carpenter's doing 3/5 of the electrician's paneling job. Now how much time does each spend working? Do they eachbenefit?

Transcribed Image Text:

Rewiring 5 hours 10 hours Paneling 10 hours 15 hours Electrician arpenter