Question

Randy and Frank are both landscapers. Randy can mow 12 lawns per day or prune 9 trees. Frank can mow 18 lawns per day or prune 27 trees. Randy and Frank each work 240 days per year.

a. Determine who has the absolute advantage at each task, what their respective opportunity costs are for mowing a lawn, and who has comparative advantage in each task.

  (Click to select)   Frank   Randy   Both Randy and Frank   Neither Randy nor Frank  has an absolute advantage in mowing lawns.

  (Click to select)   Frank   Frank   Both Randy and Frank   Neither Randy nor Frank  has an absolute advantage in pruning trees.

Instructions: Round your answers to two decimal places.

The opportunity cost of mowing a lawn for Randy is    trees.

The opportunity cost of mowing a lawn for Frank is    trees.

  (Click to select)   Randy   Frank   Both Randy and Frank   Neither Randy nor Frank  has a comparative advantage in mowing lawns.

  (Click to select)   Frank   Randy   Both Randy and Frank   Neither Randy nor Frank  has a comparative advantage in pruning trees.

b. Assuming that only one of the tasks is performed, then together Randy and Frank can service a maximum of   lawns or trees each year.  

c. If each landscaper fully specializes according to his comparative advantage, then the maximum number of lawns that can be mowed annually is  , and the maximum number of trees that can be pruned is    per year.

Answer 1

Given,

Randy can mow 12 lawns per day or prune 9 trees

Frank can mow 18 lawns per day or prune 27 trees

Part a:

1, As Frank can move more lawns per day than Randy, Frank has an absolute advantage in mowing lawns

Similarly, Frank can prune more trees per day than Randy. Hence, Frank has an absolute advantage in pruning trees

2. The opportunity cost of mowing a lawn for Randy is 9/12 trees = 0.75 trees

The opportunity cost of mowing a lawn for Frank is 27/18 trees = 1.5 trees

3. The opportunity cost of mowing a lawn is lesser for Randy than Frank. Hence, Randy has a comparative advantage in mowing lawns.

The opportunity cost of pruning a tree for Randy is 12/9 lawns = 1.25 lawns

The opportunity cost of pruning a tree for Frank is 18/27 lawns = 0.67 lawns

The opportunity cost of pruning a tress is lesser for Frank than Randy. Hence, FRank has a comparative advantage in pruning trees.

Part b:

Given, Number of working days per year = 240

If Randy works only on one work, he can mow 240 x 12 lawns = 2880 lawns per year or he can prune 240 x 9 trees = 2160 trees per year

If Frank works only on one work, he can mow 240 x 18 lawns = 4320 lawns per year or he can prune 240 x 27 trees = 6480 trees per year

Together, if Randy and Frank work only on one work, they can mow (2880+4320)=7200 lawns per year or they can prune (2160+6480)=8640 trees per year

Part C:

If both Randy and Frank work according to their comparative advantage, Randy will specialize in mowing lawns and Frank will specialize in pruning trees. In such a case they can together mow 2880 lawns and prune 6480 trees (obtained from part b)