Question

The Skipper and Mary Ann live together on an island. They each have 10 labor hours each day to divide between making pies and catching fish. The amount of each product (measured in units) they can produce in 1 hour when that hour is devoted entirely to the single good is given in the following table:

Production in 1 hour	Skipper	Mary Ann
Pies	1	3
Fish	5	2

Step #1. Suppose the Skipper and Mary Ann decide to live on separate parts of the island and not interact (“autarky”). Each person feels it is best to devote 50% of their time to each good, then eat what they themselves produce. How much does each person produce and eat? Fill in the following output/eat table:

Autarky case:

Output/Eat	Skipper	Mary Ann
Pies
Fish

Step #2. Opportunity Cost. Figure out:

How many fish Skipper sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many fish Mary Ann sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many pies Skipper sacrifices to produce 1 fish (= opportunity cost of fish): ________

How many pies Mary Ann sacrifices to produce 1 fish (= opportunity cost of fish): _______

Step #3. Specialization. Suppose they decide to specialize according to comparative advantage and trade. Who should specialize in fish and who should specialize in pie?

Mary Ann should produce .Skipper should produce .

The Skipper and Mary Ann live together on an island. They each have 10 labor hours each day to divide between making pies and catching fish. The amount of each product (measured in units) they can produce in 1 hour when that hour is devoted entirely to the single good is given in the following table:

Production in 1 hour	Skipper	Mary Ann
Pies	1	3
Fish	5	2

Step #1. Suppose the Skipper and Mary Ann decide to live on separate parts of the island and not interact (“autarky”). Each person feels it is best to devote 50% of their time to each good, then eat what they themselves produce. How much does each person produce and eat? Fill in the following output/eat table:

Autarky case:

Output/Eat	Skipper	Mary Ann
Pies
Fish

Step #2. Opportunity Cost. Figure out:

How many fish Skipper sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many fish Mary Ann sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many pies Skipper sacrifices to produce 1 fish (= opportunity cost of fish): ________

How many pies Mary Ann sacrifices to produce 1 fish (= opportunity cost of fish): _______

Step #3. Specialization. Suppose they decide to specialize according to comparative advantage and trade. Who should specialize in fish and who should specialize in pie?

Mary Ann should produce .Skipper should produce .

The Skipper and Mary Ann live together on an island. They each have 10 labor hours each day to divide between making pies and catching fish. The amount of each product (measured in units) they can produce in 1 hour when that hour is devoted entirely to the single good is given in the following table:

Production in 1 hour	Skipper	Mary Ann
Pies	1	3
Fish	5	2

Step #1. Suppose the Skipper and Mary Ann decide to live on separate parts of the island and not interact (“autarky”). Each person feels it is best to devote 50% of their time to each good, then eat what they themselves produce. How much does each person produce and eat? Fill in the following output/eat table:

Autarky case:

Output/Eat	Skipper	Mary Ann
Pies
Fish

Step #2. Opportunity Cost. Figure out:

How many fish Skipper sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many fish Mary Ann sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many pies Skipper sacrifices to produce 1 fish (= opportunity cost of fish): ________

How many pies Mary Ann sacrifices to produce 1 fish (= opportunity cost of fish): _______

Step #3. Specialization. Suppose they decide to specialize according to comparative advantage and trade. Who should specialize in fish and who should specialize in pie?

Mary Ann should produce .Skipper should produce .

The Skipper and Mary Ann live together on an island. They each have 10 labor hours each day to divide between making pies and catching fish. The amount of each product (measured in units) they can produce in 1 hour when that hour is devoted entirely to the single good is given in the following table:

Production in 1 hour	Skipper	Mary Ann
Pies	1	3
Fish	5	2

Step #1. Suppose the Skipper and Mary Ann decide to live on separate parts of the island and not interact (“autarky”). Each person feels it is best to devote 50% of their time to each good, then eat what they themselves produce. How much does each person produce and eat? Fill in the following output/eat table:

Autarky case:

Output/Eat	Skipper	Mary Ann
Pies
Fish

Step #2. Opportunity Cost. Figure out:

How many fish Skipper sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many fish Mary Ann sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many pies Skipper sacrifices to produce 1 fish (= opportunity cost of fish): ________

How many pies Mary Ann sacrifices to produce 1 fish (= opportunity cost of fish): _______

Step #3. Specialization. Suppose they decide to specialize according to comparative advantage and trade. Who should specialize in fish and who should specialize in pie?

Mary Ann should produce .Skipper should produce .

The Skipper and Mary Ann live together on an island. They each have 10 labor hours each day to divide between making pies and catching fish. The amount of each product (measured in units) they can produce in 1 hour when that hour is devoted entirely to the single good is given in the following table:

Production in 1 hour	Skipper	Mary Ann
Pies	1	3
Fish	5	2

Step #1. Suppose the Skipper and Mary Ann decide to live on separate parts of the island and not interact (“autarky”). Each person feels it is best to devote 50% of their time to each good, then eat what they themselves produce. How much does each person produce and eat? Fill in the following output/eat table:

Autarky case:

Output/Eat	Skipper	Mary Ann
Pies
Fish

Step #2. Opportunity Cost. Figure out:

How many fish Skipper sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many fish Mary Ann sacrifices to produce 1 pie (= opportunity cost of pie): ________

How many pies Skipper sacrifices to produce 1 fish (= opportunity cost of fish): ________

How many pies Mary Ann sacrifices to produce 1 fish (= opportunity cost of fish): _______

Step #3. Specialization. Suppose they decide to specialize according to comparative advantage and trade. Who should specialize in fish and who should specialize in pie?

Mary Ann should produce .Skipper should produce .

Answer 1

Consider the given problem here both of them have “10 labor hours”. “Skipper” can produce “1 pie” by using “1 labor hour” and can catches “5 fishes” with “1 labor hour”. So, if each person devotes “50%” of their time to each good, => “Skipper” produces “1*5=5 pies” and “5*5=25 fishes”. Similarly “Mary Ann” produces “3*5 = 15 pies” and catches “2*5 = 10 units” of fishes. Consider the following table of output.

2).

Skipper can produce “1 pie” with “1 hour of labor” or can catch “5 fishes”, => Skipper sacrifices “5 fishes” to produce “1 pie”, => the opportunity cost of pie = 5 fishes.

Mary Ann can produce “3 pie” with “1 hour of labor” or can catch “2 fishes”, => Mary Ann sacrifices “2 fishes” to produce “3 pie”, => the opportunity cost of pie = 2/3 fishes.

So, the opportunity cost of fish is “1/5 of pies” for “Skipper” and the opportunity cost of fish is “3/2” fishes for “Mary Ann”.

3).

Now, “Skipper’s” opportunity cost of producing pie is more than “Mary’s” opportunity cost of producing pie, => “Mary” have the comparative advantage of producing “Pie” and “Skipper” has the comparative advantage of catching fish.

So, here “Skipper” should specialize to the production of “fish” and “Mary” should specialize to the production of pies.