Question

NOTE THIS QUESTION HAS SIX ANSWERS. BE CLEAR WITH YOUR ANSWERS BY LABELING EACH ANSWER.

	Output per hour of work	Output per hour of work
	Catfish	Cowboy Boots
Arkansas	6	2
Tennessee	3	2

The table above describes the output per hour worker measured as pounds of catfish and pairs of cowboy boots in Arkansas and Tennessee.

​A) Who has the absolute advantage in producing​ Catfish?

​B) For​ Arkansas, the opportunity cost of one more pound of catfish is​ ________ pair of boots.

​C) For​ Arkansas, the opportunity cost of one more pair of boots is​ __________ pounds of catfish.

​D) For​ Tennesseee, the opportunity cost of one more pound of catfish is​ ________ pair of boots.

​E) For​ Tennessee, the opportunity cost of one more pair of boots is​ __________ pounds of catfish.

​F) Who has the comparative advantage in cowboy​ boots?

Answer 1

Arkansas can produce 6 catfish or 2 cowboy boots in one hour while in the same time duration Tennessee is able to produce 3 catfish or 2 cowboy boots. opportunity cost of producing one good is the reduction in the amount of the other good that is not produced. Country that has a lower opportunity cost of producing a particular good, is considered to have comparative advantage in its production

A) Arkansas. It can produce more catfish in one hour. Therefore it has absolute advantage in its production.

B) the opportunity cost of one more pound of catfish is 2/6 or 1/3 pair of cowboy boots

C) the opportunity cost of one more pair of boots is 6/2 = 3 pounds of catfish

D). For Tennessee the opportunity cost of one more pound of catfish is 2/3 pair of boots

E) the opportunity cost of one more pair of boots is 3/2 pounds of catfish

F) the opportunity cost of producing one more pair of boots is lower for Tennessee. Therefore Tennessee has comparative advantage in cowboy boots.