Serena and Joe both produce sporting goods equipment. The table below shows the amount of equipment...

Serena and Joe both produce sporting goods equipment. The table below shows the amount of equipment each producer can produce if he/she devotes all of his/her time to each product. Using the theory of comparative advantage, choose the correct answer based on the information in the table

	Joe		Serena
	Baseballs	Footballs	Baseballs	Footballs
Devote all time to producing baseballs	10	0	4	0
Devote all time to producing footballs	0	10	0	8

Group of answer choices

-Joe should produce footballs and baseballs. Serena should find another occupation

-Serena should produce baseballs and Joe should produce footballs

-Serena should produce footballs and Joe should produce baseballs

-Both individuals should produce footballs, since nobody is interested in baseball any more

Expert Solution

Ans.- (C)

Opportunity cost of producing 1 baseball:

for Joe = 10/10 = 1 football

for Serena = 8/4 = 2 footballs

Since opportunity cost of producing 1 baseball is lower for Joe so Joe has a comparative advantage in producing baseball. Therefore, Serena has a comparative advantage in producing footballs.

Hence ,Serena should produce footballs and Joe should produce baseballs.

Rahul Sunny answered 3 years ago

Suppose that France and Germany both produce wine and schnitzel. The table below shows combinations of...

Suppose that France and Germany both produce wine and schnitzel. The table below shows combinations of the goods that each country can produce in a day. France Germany Wine (Bottles) Schnitzel (Pounds) Wine (Bottles) Schnitzel (Pounds) 0 12 0 25 1 9 1 20 2 6 2 15 3 3 3 10 4 0 4 5 5 0 1. Who has the comparative advantage in producing wine and who has the comparative advantage in producing schnitzel? A. France has...

Consider the data in table below which shows the time required to produce a particular item....

Consider the data in table below which shows the time required to produce a particular item. Using that data, calculate the learning rate associated with this product. Units Labor Hrs 5 155 9 147 13 137 17 97 25 72

The table below shows the production possibilities of two countries, X and Y, of two goods,...

The table below shows the production possibilities of two countries, X and Y, of two goods, A and B, given a fixed amount of resources and particular technology. (For country X: a worker can produce per month 78A or 26B. For country Y a worker can produce per month Y: 96A or 48B). A B X 78 26 Y 96 48 1. Which country has the absolute advantage in A, and which country has the absolute advantage in B? (1...

Sporting Goods is a retailer of sporting equipment. Last year, Terry's sales revenues totalled $2,500,000. Of...

Sporting Goods is a retailer of sporting equipment. Last year, Terry's sales revenues totalled $2,500,000. Of this amount, approximately $1,612,000 were variable, while the remainder were fixed. Since Terry's Sporting Goods offers thousands of different products, its managers prefer to calculate the break-even point in terms of sales dollars rather than units. 1. What Terry current operating income? (Prepare a contribution margin format income statement.) 2. What is Terry contribution margin ratio? 3. What is Terry break-even point in sales...

The table below gives the amount of output/total product (TP) that a firm can produce with...

The table below gives the amount of output/total product (TP) that a firm can produce with various combinations of labor (L) and capital (K): K L TP AP MP 10 4 91 29 10 5 121 10 6 150 10 7 175 10 8 197 10 9 212 10 10 217 10 11 215 a. Is the above production function a short run or long run production function? EXPLAIN why. b. Complete the table by computing the average product (AP)...

Hawk Sporting Goods is a manufacturer of falconry equipment. Hawk is analyzing the purchase of a...

Hawk Sporting Goods is a manufacturer of falconry equipment. Hawk is analyzing the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $202,000. The equipment will have an initial cost of $850,000 and have a 6-year life. There is no salvage value for the equipment. If the hurdle rate is 9%, what is the approximate net present value? Ignore income taxes. (Future Value of $1, Present...

Zues Sporting Goods is a manufacturer of falconry equipment. Zues is analyzing the purchase of a...

Zues Sporting Goods is a manufacturer of falconry equipment. Zues is analyzing the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $205,000. The equipment will have an initial cost of $950,000 and have a 6-year life. There is no salvage value for the equipment. If the hurdle rate is 7%, what is the approximate net present value? Ignore income taxes. 1. $950,000 2. $27,132 3....

Kick and Swing Inc. is a wholesaler of sporting goods equipment for retailers in a local...

Kick and Swing Inc. is a wholesaler of sporting goods equipment for retailers in a local metropolitan area. The company buys sporting goods equipment direct from manufacturers and then resells them to individual retail stores in the regional area. The raw data in Figure 14-20 illustrate some of the information required for the company’s purchase order system. As you can see, this information is characteristic of accounting purchase order systems but is not well organized. In fact, because of the...

Table 1 given below shows the number of labor hours required to produce 1 bushel of...

Table 1 given below shows the number of labor hours required to produce 1 bushel of wheat and 1 ton of iron in Russia and North Korea. Table 1 Labor hours to make: In North Korea In Russia 1 bushel of wheat 4 1 1 ton of iron 10 5 You make several Ricardian assumptions: these are the only two commodities, the productivity of labor is constant for each product no matter how much is produced, and competition prevails in...

Amount Spent on Energy: The table to the right shows the amount spent (in dollars) on...

Amount Spent on Energy: The table to the right shows the amount spent (in dollars) on energy in one year for a random sample of households from four regions in the United States. Conduct a test at the alpha equal .05 level to determine if there is a difference in the mean amount spent in dollars on energy Run the ANOVA analysis using excel data analysis tools on this sheet to show the work. Answer the following questions on the...

Question