1. Consider a house shared by Dave, Ezra and Fatima. The following table shows how many...
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1. Consider a house shared by Dave, Ezra and Fatima. The following table shows how many units of each chore each person can do with an hour devoted to that chore. Assume that each person will devote a total of 48 hours/week to the two chores. (a) Who has the comparative advantage in each chore? (b) Assume the three decide to get chores done cooperatively and efficiently. Draw the combined production possibility frontier and label each endpoint and kink with numerical values. Indicate who specializes in the production of what good on each line segment of the graph. (c) Suppose each person is splitting his or her hours evenly between the two chores. Where is this point on your PPF diagram? Relative to this point, describe how you might measure the gains from efficient trade in chores. Person Dave Ezra Fatima Number of windows cleaned in an hour 2 12 4 Square feet of floors Iscrubbed in an hour 6 3 2 1. Consider a house shared by Dave, Ezra and Fatima. The following table shows how many units of each chore each person can do with an hour devoted to that chore. Assume that each person will devote a total of 48 hours/week to the two chores. (a) Who has the comparative advantage in each chore? (b) Assume the three decide to get chores done cooperatively and efficiently. Draw the combined production possibility frontier and label each endpoint and kink with numerical values. Indicate who specializes in the production of what good on each line segment of the graph. (c) Suppose each person is splitting his or her hours evenly between the two chores. Where is this point on your PPF diagram? Relative to this point, describe how you might measure the gains from efficient trade in chores. Person Dave Ezra Fatima Number of windows cleaned in an hour 2 12 4 Square feet of floors Iscrubbed in an hour 6 3 2
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Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st edition
Authors: David M. Maloney, William H. Hoffman, Jr. , William A. Raabe, James C. Young
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