The table below shows the output per week of two manufacturers, Serena and Venus. They can either devote their time to making Yogurt or making Ice

  1. The table below shows the output per week of two manufacturers, Serena and Venus. They can either devote their time to making Yogurt or making Ice Cream. 

The output per week of two manufacturers

                       Serena             Venus 

Yogurt:         750 Gallons      800 Gallons 

Ice Cream:    950 Gallons      900 Gallons 

 Answer the following questions with an explanation of why you determined the answer: 

  • Who has the absolute advantage in making Yogurt? Explain why. 
  • Who has the absolute advantage in making Ice Cream? Explain why. 
  • What is Venus’s opportunity cost of making a Yogurt? Explain why. 
  • What is Serena’s opportunity cost of making a Yogurt? Explain why. 
  • What is Venus’s opportunity cost of making Ice Cream? Explain why. 
  • What is Serena’s opportunity cost of making Ice Cream? Explain why. 
  • Who has the comparative advantage in making Yogurt? Explain why. 
  • Who has the comparative advantage in making Ice Cream? Explain why. 
  1. You and your neighbor are the only people in the world that produces cashews and mushrooms. You do not engage in trade with each other. On your own, you can each produce the following per day: 

Cashews and Mushrooms Production

                                                       You                                                  Neighbor 

                                         Cashews        Mushrooms             Cashews          Mushrooms 

Only gather cashews:      12 pounds          0 pounds                 5 pounds            0 pounds 

Only gather mushrooms:    0 pounds          6 pounds                 0 pounds            5 pounds 

 Right now, you each split your time between gathering each product. You currently gather and consume eight pounds of cashews and two pounds of mushrooms, while your neighbor is gathering and consuming three pounds of cashews and one pound of mushrooms. Show numerically how specialization and trade with each other can make you better off. Who specializes in the production of each product, and what trade could you then make with each other that would benefit both of you? Explain your answers. 

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

   1). Self- Reflection. Practice involves self-reflection and checking for bias to ensure your design and topic will withstand robust scrutiny from

   1). Self- Reflection. Practice involves self-reflection and checking for bias to ensure your design and topic will withstand robust scrutiny from peers and academics. A strong research effort minimizes bias and presents alternative and opposing perspectives, including issues concerning methodology. Bias creates errors in research and can take the

First, read the case  Money and Credit on the American Frontier . Additional

First, read the case  Money and Credit on the American Frontier . Additional readings (not required, but recommended by the case study’s author) · Michener, R. (2011, January 13). Money in the American colonies. Retrieved from  · Schweikart, L. (2001, January 1). The non-existent frontier bank robbery. Retrieved from