Question

Robinson can pick 50 pieces of fruit or catch 20 fish in a day. Friday can pick 40 pieces of fruit or catch 10 fish in a day. Which of the following is a likely trade?

A. Robinson gives Friday 3 pieces of fruit in exchange for one fish.

B. Robinson gives Friday 1/2 a fish in exchange for a piece of fruit.

C. Friday gives Robinson 3 pieces of fruit in exchange for one fish.

D. Friday gives Robinson 1 piece of fruit for a fish.

E. Friday gives Robinson 4 fish in exchange for one piece of fruit.

***I think it's E, but I'm not 100% sure! What do y'all think?! Thanks :)

Answer 1

so the trade wants to 'balance' things

Answer 2

yes :)

Answer 3

so i'm looking for something that is an even trade?

Answer 4

Robinson :
50 fruit ~ 20 fish

Friday :
40 fruit ~ 10 fish

?

Answer 5

okay, so what happens next?

Answer 6

~ represents "equivalent to"

Answer 7

okay!

Answer 8

for both of them fish is precious

Answer 9

okay:)

Answer 10

is this from economics ? if so, there must be some specific method that we are supposed to use right ?

Answer 11

yes, this is from economics... i think we have to consider comparative and absolute advantage :/

Answer 12

@rsadhvika how would I apply those concepts?

Answer 13

Robinson :
50 fruit ~ 20 fish
1fish ~ 5/3 fruit

Friday :
40 fruit ~ 10 fish
1 fish ~ 4 fruit

Answer 14

okay, i'm following:)

Answer 15

So Robinson will be willing to trade `5/2` fruit for 1 fish

and

Friday will be willing to trade 4 fruits for 1 fish

Answer 16

so would C be the most likely choice?

Answer 17

Most likely, because Friday has less fish

Answer 18

Ah okay, thanks so much!! :)

Answer 19

So option A may not be a possibility

Answer 20

see
https://www.khanacademy.org/economics-finance-domain/microeconomics/choices-opp-cost-tutorial/gains-from-trade-tutorial/v/comparative-advantage-specialization-and-gains-from-trade

Answer 21

Oh okay!! Also, @rsadhvika do you happen to get this one too? It's kind of similar...

Suppose you can make 12 pizzas or paint 1 fence in an hour. Your brother, on the other hand, can make 8 pizzas or paint 2 fences in an hour. Which of the following statements is true?

A. Your opportunity cost for making 1 pizza is painting 1/6 of a fence.

B. Your brother's opportunity cost for making 1 pizza is 4 fences.

C. You have a comparative advantage in pizza production.

D. Your brother's opportunity cost for making 1 fence is making 1/4 of a pizza.

E. You have an absolute advantage in both activities.

So 12 pizzas ~ 1 fence for me

and 8 pizzas ~ 2 fences for my brother

Where would I go from here?

Answer 22

You :
12 pizzas ~ 1 fence
1 pizza ~ 1/12 fence

Your brother :
8 pizzas ~ 2 fences
1 pizza ~ 1/4 fence

Answer 23

Okay, so automatically, choices A, B, and D are not the answers right?

Answer 24

You need to give up 1/12 of a fence for every 1 pizza that you want to make, so the `opportunity cost` of making 1 pizza is 1/12 fence

Answer 25

yes! A,B,D are out

Answer 26

:)

Answer 27

whats the difference between comparative and absolute advantages ?

Answer 28

absolute is producing goods using less resources and comparative is producing goods at a smaller opportunity cost right?

Answer 29

so would the answer be C? I have the comparative advantage in pizza production?

Answer 30

You :
12 pizzas ~ 1 fence
`1 pizza ~ 1/12 fence`

Your brother :
8 pizzas ~ 2 fences
`1 pizza ~ 1/4 fence``

Answer 31

you're producing pizzas at a rate of 1/12 fence per pizza
while your brother is producing at 1/4 fence per pizza

so your production is 3 times cheaper than your brother's produciton, so surely you have a comparative advantage in pizza production

Answer 32

yay! thank you!! :) could you possibly help with two more? @rsadhvika :)

Suppose Doward can peel 15 potatoes in an hour, or he can slice 20 onions in an hour. Shashawna can peel 30 potatoes in an hour, or she can slice 25 onions. Which of the following statements is true?

A. Doward has a comparative advantage in potato peeling.

B. Shashawna has an absolute advantage in both activities.

C. Shashawna has a comparative advantage in onion slicing.

D. Shashawna's opportunity cost of peeling one potato is 6/5 of an onion.

E. Doward's opportunity cost of peeling one potato is 6/5 of an onion.

**I think it's D.. what do you think?

Answer 33

Doward :
15 potatoes ~ 20 onions
1 potatoe ~ 4/3 onion
1 onion ~3/4 potatoe

Shashawna :
30 potatoes ~ 25 onions
1 potatoe ~ 5/6 onions
1 onion ~ 6/5 potatoe

Answer 34

okay:)

Answer 35

Shashawna's opportunity cost of peeling 1 potatoe is 5/6 of inion, so D is wrong.

Answer 36

ohh okay darn :(

how can i find the right answer for this problem?

Answer 37

Notice that Shashawna can peel MORE of both potatoes and onions compared to Doward

Answer 38

since her production is more for both potatoes and onions, do we say she has absolute advantage in both activities ?

Answer 39

yes!! so the answer is B? :O

Answer 40

yes!

Answer 41

watch that khan video, its soo good

Answer 42

yay!!! :) okay, i have one last one!! :D

and okay i will!! :)

Answer 43

Suppose you can clean 3 windows or wash 2 shirts in one hour. Your friend Mookie can clean 6 windows or wash 4 shirts in one hour. Which of the following statements is true?

A. You have an absolute advantage in both activities.

B. You have a comparative advantage in cleaning windows.

C. Your friend has a comparative advantage in cleaning windows.

D. Your opportunity cost of cleaning one window is 2/3 of a shirt.

E. Your friend's opportunity cost of washing one shirt is 2/3 of a window.

*** At first I thought it was C, but now based off the other problems, I don't think that's right... How would I start this one?

Is it 3 windows ~ 2 shirts me and 6 windows ~ 4 shirts Mookie?

Answer 44

You :
3 windows ~ 2 shirts
1 window ~ 2/3 shirt
1 shirt ~ 3/2 window

Mookie :
6 windows ~ 4 shirt
1 window ~ 2/3 shirt
1 shirt ~ 3/2 window

Answer 45

you're not cleaning more, so you don't have absolute advantage. strike off option A

Answer 46

okay!

Answer 47

And E is wrong because 1 shirt for him is 3/2 window not 2/3 window right?

Answer 48

yes, and also notice that opportunity costs for windows and shirts are same for both You and Mookie

Answer 49

yes!! so it's either B or C? :O

Answer 50

so neither has comparative advantage in any of the goods

Answer 51

so strike off B and C

Answer 52

ohhhh okay, so the answer is D then?? :O

Answer 53

You :
3 windows ~ 2 shirts
`1 window ~ 2/3 shirt`
1 shirt ~ 3/2 window

Mookie :
6 windows ~ 4 shirt
1 window ~ 2/3 shirt
1 shirt ~ 3/2 window

Answer 54

yes, D is right ^^

Answer 55

yay!! thank you so much!!! :D