Econ 231 Homework 3

Refer to the accompanying figure. Moving from point C to point B, the opportunity cost of 25 more salads is:

5 pizzas.

Refer to the accompanying table. Based on their comparative advantage, Martha should specialize in making _______ while Julia should specialize in making _______.

pies; cakes

Suppose Colin brews beer and makes cheese. If Colin can increase his production of beer without decreasing his production of cheese, then he is producing at an:

inefficient point.

Refer to the accompanying table below. The marginal cost of going on a fourth ride at the carnival is:

$1

Refer to the accompanying figure. Moving from point B to point A, the opportunity cost of 25 more salads is:

10 pizzas.

Refer to the accompanying figure. If this restaurant makes 75 salads in one hour, then what's the maximum number of pizzas it can make in that same hour?

30

Refer to the accompanying table below. How many rides should you ride at the carnival:

5

If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. Which of the following statements is correct?

Ana has the comparative advantage in fudge, but Leo has the absolute advantage in fudge.

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct?

Dan should specialize in sandwiches, and Tracy should specialize in smoothies.

Suppose Karl divides his time between making birdhouses and growing artichokes. Karl's friend recently gave Karl some new woodworking tools that greatly reduced the amount of time it takes Karl to make each birdhouse, but the new tools had no impact on the amount of time it takes Karl to grow artichokes. Thus, the new tools _____ Karl's opportunity cost of growing artichokes.

increased