Question

Princess Leia and Luke Skywalker find themselves trapped on the moon of Alderaan. While they are waiting for the rebel fleet to rescue them, they can survive by eating daptoids and polytheerons. One of either species will provide a meal for two rebels. These are both tasty but difficult to catch food sources. Of course, Leia is better at catching them than Luke.

Below is a table of the results Leia prepared.

	TOTAL LABOR TO CATCH
	One Daptoid	One Polytheeron
Leia	1 hour	1 hour
Luke	2 hours	3 hours

1. Who has the absolute advantage in catching daptoids? For catching polytheerons?
2. Would it make sense for the same person to be catching both while the other watches?
3. What opportunity costs do Luke and Leia have for these food items?
4. Who has the comparative advantage in hunting daptoids? Polytheerons?
5. Draw the 12 hour linear production possibilities curve for Leia and Luke. Put these on the same graph, using graph paper is recommended.
6. What would you recommend these exiles do (based on 12 hours)?

	Total possibilities
	Daptoids	Polytheerons
Luke
Leia
Total

	Total possibilities
	Daptoids	Polytheerons
Luke
Leia
Total

Answer 1

Before we begin let us start by defining absolute advantage and comparative advantage.

Absolute Advantage: It is the ability of an individual or a group to carry out a task or produce a good more efficiently than another group, using the same amount of inputs and resources.
Comparative Advantage: Comparative advantage refers to an economy's ability to produce goods and services at a lower opportunity cost than that of trade partners i.e a producer will produce more of a good on which he/she has more of an advantage.

Let us suppose that Luke and Leia are on the planet for 12 hours. Using that time for our calculations let us calculate the necessary values to find out comparative and absolute advantage.

I)Daptoids that can be caught in 12 hours.

a) Leia= 1 daptoid per hour. Therefore leia can catch 1 daptoid*12 hours= 12 Daptoids (1*12=12). Leia can catch 12 daptoids in 12 hours.

b) Luke= 1 daptoid per two hours= 1/2=0.5 daptoids per hour. Therefore Luke can catch 0.5 daptoids* 12 hours= 6 (0.5*12=6). Luke can catch 6 daptoids in 12 hours

II) Polytheerons that can be caught in 12 hours.

a) Leia=1 Polytheeron per hour. Therefore leia can catch 1 Polytheeron*12 hours= 12 Polytheerons (1*12=12). Leia can catch 12 Polytheerons in 12 hours.

b) Luke= 1 Polytheeron per 3 hours. 1/3= 0.33 Polytheeron per hour. Therefore Luke can catch 0.33 Polytheerons*12 hours= 4 Polytheerons. Luke can catch 4 Polytheerons in 12 hours.

Subsections:

1) As is evident in Ia) and Ib) Leia has an absolute advantage in catching Daptoids, since she can capture 12 in 12 hours whereas Luke can capture only 6 in 12 hours. This shows that Leia can capture twice as much as Luke can.
As is evident in IIa) and IIb) Leia has an absolute advantage in catching Polytheerons since she can capture 12 in 12 hours whereas Luke can capture only 4 in 12 hours. This shows that Leia can capture thrice as much as Luke can.

2) It does not make sense for one to catch while the other watches. If it takes Leia 1 hour to capture 1 Polytheeron and it takes Luke 2 hours to capture 1 Daptoid, then if they work together, Leia can capture 2 Polytheerons in 2 hours and at the same time Luke can capture 1 Daptoid. That would make the total amount of species at hand to eat= 3 species. If Luke were to watch Leia capture for 2 hours they would end up with only 2 species and not 3 as proven before.
Thus it is more optimal for both to work together than for one to work while the other watches since the benefit gained from working together is more.

3) Opportunity cost is calculated with the following formula,
Opportunity cost= What you are sacrificing/ What you are gaining.

If Leia were to choose hunting Polytheerons over Daptoidss assuming she hunts for 12 hours, the Opportunity cost would be=Total Daptoids caught in 12 hours/ Total Polytheeron caught in 12 hours.
OC= 12/12= 1
Opportunity cost= 1
This indicates that with every Polytheeron that Leia catches she loses 1 Daptoid
If Luke were to choose hunting Polytheerons over Daptoids assuming he hunts for 12 hours, the Opportunity cost would be=Total Daptoids caught in 12 hours/ Total Polytheerons caught in 12 hours.
OC= 6/4= 1.5
Opportunity Cost= 1.5
This indicates that with every Polytheeron that Luke catches he loses 1.5 Daptoid.

4) Comparative Advantage
Daptoids= Number of Daptoids caught by Leia in 12 hours/ Number of Polytheerons caught by Leia in 12 hours
=12/12= 1
Therefore, Leia has an equal advantage in capturing both Daptoids and Polytheeron.
Polytheerons= Number of Daptoids caught by Luke in 12 hours/ Number of Polytheerons caught by Luke in 12 hours
=6/4= 1.5
Therefore, Luke has a comparative advantage in capturing Daptoids over Polytheerons.

Summary: Leia has both absolute and comparative advantage over Luke in matters of hunting Daptoids and Polytheerons. But since Luke has a better comparative advantage in hunting daptoids over polytheerons, he should hunt daptoids and Leia shoul