Who has absolute advantage in setting traps

Reference no: EM133279179

Question 1 - Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favourite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. Calculate the opportunity cost of Tammie's trip to the concert and explain your steps.

Question 2 - Tom and Jerry have two tasks to do all day: set traps and build sandcastles. If Tom spends all day setting traps, he will have set 16 traps. If he instead devotes his day to building sandcastles, Tom will build 4 sandcastles. If Jerry spends his day setting traps, he will set 14 traps; if he spends the day building sandcastles, he will build 7 sandcastles.

i. Who has Absolute Advantage in setting traps? Explain in 1-2 sentences. Who has Absolute Advantage in building sandcastles? Explain in 1-2 sentences.

ii. Who has the least Opportunity Cost of setting traps? Calculate the Opportunity Cost of setting traps for Tom and Jerry to make the comparison. Show steps.

iii. Who has the least Opportunity Cost of building sandcastle? Calculate the Opportunity Cost of building sandcastles for Tom and Jerry to make the comparison. Show steps.

iv. If each of them decides to specialize in the job in which they have comparative advantage, how many traps will be set and how many sandcastles will be built?

Reference no: EM133279179

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