Who has the absolute advantage in larger production

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Reference no: EM133401675

Case Study: Jack makes 2 kinds of beer: a lager and a stout. Every 3 months he can either make 10 gallons of lager or 5 gallons of stout. Bob can also make 2 kinds of beer: a lager and a stout. But every 3 months bob can only make 3 gallons of lager or 4 gallons of stout.

Questions:

Who has the absolute advantage in larger production and/or stout production, and why?
Who has the comparative advantage in larger production and/or stout production and why?
What is the opportunity cost of each beer for each person?
What is the name of the graph you could create with this information?
Given these facts what should these individuals do and why?

Reference no: EM133401675

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