Question

2. Kent, Jasmine, and Hilary produce hoodies and slippers using only their labour. The table provides the information about the amount of labour that Kent, Jasmine, and Hilary must use to produce these hoodies and slippers. Assume that Kent, Jasmine, and Hilary each have 60 hours of labour available. Amount of labour required to produce one hoodie Amount of labour required to produce one slipper 4 hours of labour Kent 1 hours of labour Jasmine 5 hours of labour 3 hours of labour Hilary 2 hours of labour 2 hours of labour c. 2. Suppose Kent, Jasmine, and Hilary allocate their resources evenly in the production of each good, what will be the total production of hoodies and slippers? b. Who has the absolute advantage in the production of hoodies? Slippers? What is Kent's, Jasmine's, and Hilary's opportunity cost of producing one hoodie in terms of slippers? d. What is Kent's, Jasmine's, and Hilary's opportunity cost of producing one slipper in terms of hoodies? Who has the comparative advantage in the production of hoodies? Slippers? f. If Kent, Jasmine, and Hilary specializes in the production in which they have a comparative advantage and they only want to produce 40 hoodies, then how many units of hoodies and slippers will each of them produce? e

Answer 1

9 if resources allocate evenly. Hoddie slipper kent 30 7.5 Jasmine 6 lo Hila 15 lary 15 b) absolute advantage advantage in Production of Hoddie → slipper » Kent Hilary

opportunity cost of producing hoddie Kent » ť slipper = 0.25 Jasmine » slipper = 1.66 Hilary I slipper n d) OPP cost of producting I slippen Kent - u hoddie Jasmine - 3 hoddie = 0.6 33 Hilary » I slipper e) Kent ches comparative advantange in Production of hoodie. Jasmine has comparative advantage in production of slipper

Đ They will end و P = Producing hoddies 40 units. (Kent) Slippers = 5 (kent) + 2o (Jasmine) + 34 chilary) units. ll Lo