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Lecture Exercise #3Spring 2022You will work on these exercises during class on Wednesday, January 19th. You are strongly encouraged to work with 3 or 4 of your peers, where you will discuss and work through the problems together. The instructional team will circulate between groups to answer your questions and provide guidance. Post your answers on Poll Everywhere (PE) using the link provided by Professor Balaban. Note that the PE link will be opened on command during class and will close with 15-20 minutes left in class. A warning will be given a few minutes before the link is closed. We will review the answers after the link isclosed.Honor Code Notice: You are not permitted to upload any content from this course to the web in any form, including but not limited to Chegg, Course Hero, Coursera, Google Drive, etc. If you post my coursecontent, you may be violating my intellectual property rights. In utilizing web sources to upload or download course content, you risk violating the University’s Honor Code.1. In a certain economy, brooms and radios are produced, and the economy currently operates on its production possibilities frontier. Which of the following events would allow the economy to produce more brooms and more radios, relative to the quantities of those goods that are being produced now?a. Foreign labor is permitted to freely immigrate into the country.b. There is a technological advance in the broom industry, but the radio industry experiences no such advance.c. There is a technological advance in the radio industry, but the broom industry experiences no such advance.d. All of the above are correct.The table below shows the number of hours it takes Hank and Carl to produce either a quilt or dress. For instance, according to the table it takes Hank 50 hours to make a quilt, but it takes Carl 90 hours to make the same quilt. Use this information to answer questions 2 and 3.2. Who has the comparative advantage in making quilts? Who has the comparative advantage in making dresses?a. Hank; Hankb. Hank; Carlc. Carl; Carld. Carl; HankLabor Hours needed to make one Quilt DressHank OC 1/5 50 hrs. 10 hrs.Carl 1/2 90 hrs. 45 hrs.3. If Hank and Carl decide to specialize according to their comparative advantage and trade with each other, then which of the following is an acceptable terms of trade?a. 6 quilts: 8 dressesb. 3 quilts: 12 dressesc. 5 quilts: 30 dressesd. More than one response is correct.Use the table below to answer questions 4 and 5. ???Opportunity Cost of Each ProductJars of Peanut Butter Jars of JellyRob pb 1 jelly 1 PBEllen jelly 4 jelly 1/4PB4. True or False: Rob and Ellen will agree to trade with each other if the terms of trade are 20 jars of peanut butter for 50 jars jelly.a. Trueb. False5. True or False: If the terms of trade are 20 jars of peanut butter for 15 jars of jelly, then Ellen would agree to trade, but Rob would not.a. Trueb. False6. Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity?a. One individual’s production possibilities frontier is steeper than the other individual’s production possibilities frontier.b. One individual is faster at both activities than the other individual.c. One individual’s opportunity costs are the same as the other individual’s opportunity costs.d. None of the above is correct; one of the two individuals always will have a comparative advantage in at least one of the two


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UNC-Chapel Hill ECON 101 - Lecture Exercise 03

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