ECON 101 Quiz: ECON 101 UW Madison Quiz1Summer2010

trading in the unger gamesto end hungrt

a) opportunity cost of one squirrel for katniss

b)opportunity cost of one squirrel for gale

c)opportunity cost of one quart of berries for katniss

d)opportunity cost of one quart of berries for gale

e) who has the absolute advantage?

f) who has the comparative advantage in squirrels?

g)draw the production possibility for each hunter/gatherer for each week. Be sure to label your graphs and their axes.

h) initially (per-trade) katniss is hunting 6 squirrels and gathering 2.5 quarts of berries per day. Gale is hunting 4 squirrels and picking 1.5 quarts of berries per day. Show that with trade, they can both be better off. Give a rational exchange rate of squirrels per quart of berries. Plot their post trade allocations on their respective PPF graphs in g).