# ECON 2010 Study Guide - Quiz Guide: Comparative Advantage, Absolute Advantage, Opportunity Cost

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PROBLEMS AND APPLICATIONS

Comparative Advantage and Absolute Advantage

1. Maria can read 20 pages of economics in an hour. She can also read 50 pages of

sociology in an hour. She spends 5 hours per day studying.

a. Draw Maria’s production possibilities frontier for reading economics and

sociology.

b. What is Maria’s opportunity cost of reading 100 pages of sociology?

2. Pat and Kris are roommates. They spend most of their time studying (of course), but they

leave some time for their favorite activities: making pizza and filtering water. Pat takes

4 hours to filter a bottle of water and 2 hours to make a pizza. Kris takes 6 hours to filter

a bottle of water and 4 hours to make a pizza.

a. What is each roommate’s opportunity cost of making a pizza? Who has the

absolute advantage in making pizza? Who has the comparative advantage in

making pizza?

b. If Pat and Kris trade foods with each other, who will trade away pizza in

exchange for water?

c. The price of pizza can be expressed in terms of bottles of water. What is the

highest price at which pizza can be traded that would make both roommates better

off? What is the lowest price? Explain.

3. Suppose a gardener produces both green beans and corn in her garden. If she must give

up 14 bushels of corn to get 5 bushels of green beans, then calculate her opportunity cost

of 1 bushel of green beans.

4. Mike and Sandy are two woodworkers who both make tables and chairs. In one month,

Mike can make 4 tables or 20 chairs, where Sandy can make 6 tables or 18 chairs. Given

this, calculate the opportunity cost of 1 table for both Mike and Sandy.

5. If Wrex can produce more math problems per hour and more book reports per hour than

Maxine can, then Wrex cannot gain from trading math problems and book reports with

Maxine. Explain why this statement is true or false.

6. Jake can complete an oil change in 45 minutes and he can write a poem in 90 minutes.

Ming-la can complete an oil change in 30 minutes and she can write a poem in 90

minutes. Jake's opportunity cost of writing a poem is lower than Ming-la's opportunity

cost of writing a poem. True of false? What is Jake’s opportunity cost of writing a

poem?

## Document Summary

Comparative advantage and absolute advantage: maria can read 20 pages of economics in an hour. She can also read 50 pages of sociology in an hour. She spends 5 hours per day studying: draw maria"s production possibilities frontier for reading economics and sociology, what is maria"s opportunity cost of reading 100 pages of sociology, pat and kris are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and filtering water. 4 hours to filter a bottle of water and 2 hours to make a pizza. Explain: suppose a gardener produces both green beans and corn in her garden. Mike can make 4 tables or 20 chairs, where sandy can make 6 tables or 18 chairs. Given this, calculate the opportunity cost of 1 table for both mike and sandy: if wrex can produce more math problems per hour and more book reports per hour than.