EC 252 Principles of Microeconomics Spring 2020 Homework 2 Due Date Friday February 14 2020 Name Leslie and Dan can produce chairs and tables according to the following labor production schedule Chairs Tables Leslie 1 chair every 30 minutes 1 table every 20 minutes Dan 1 chair every 10 minutes 1 table every 1 hour Fill out the following table to display the numbers of chairs and tables each could produce in an 8 hour workday if they exclusively made just the one item Chairs Tables Leslie 16 24 Dan 48 8 Who has an absolute advantage in producing chairs Who has an absolute advantage in producing tables Dan Leslie 1 In order to make 1 table how many chairs must Leslie give up In order to make 1 table how many chairs must Dan give up Who has a LOWER opportunity cost to produce 1 table Leslie Consequently who has a comparative advantage in producing tables In order to make 1 chair how many tables must Leslie give up In order to make 1 chair how many tables must Dan give up Who has a LOWER opportunity cost to produce 1 chair Consequently who has a comparative advantage in producing chairs 2 3 6 Leslie 3 2 1 6 Dan Dan 2 Who has a specialization in chairs Dan Leslie Who has a specialization in tables If Leslie makes all tables and Dan makes all chairs how much is our 2 person society producing Chairs 48 Tables 24 If Leslie offered 1 table in exchange for some amount of chairs what amount would be accepted by Dan Chairs 6 Chair 2 3 If Leslie offered 1 table in exchange for some amount of chairs what amount would be accepted by Leslie Consequently what is the range of chairs that would need to be offered in exchange for 1 table that would be acceptable to both sides 2 3 chair 6 3 Leslie makes all tables Dan makes all chairs What do their pre trade baskets look like in terms of chairs tables Leslie 0 24 Dan 48 0 Leslie then trades 1 table to Dan in exchange for 2 chairs What do their post trade baskets look like in terms of chairs tables Leslie 2 23 Dan 46 1 Draw the individual PPFs for both Leslie and Dan below Include the following points on the graph Leslie s all chair endpoint Leslie s all table endpoint Dan s all chair endpoint and Dan s all table endpoint Also label which PPF belongs to which player PPFs for Leslie and Dan l s e b a T 30 25 20 15 10 5 0 0 10 20 40 50 60 30 Chairs 4 Draw the societal PPF below Include the following points on the graph all chair endpoint all table endpoint and the midpoint where the kink is where one player is making all chairs and the other is making all tables Also label which section of the PPF shows the contribution of which player Societal PPF l s e b a T 35 30 25 20 15 10 5 0 0 10 20 30 40 50 60 70 Chairs 5 Now let s talk about prices How many chairs and tables would Dan produce if the price of chairs Pc was 1 000 and the price of tables Pt was 1 Chairs 48 Tables 0 How many chairs and tables would Leslie produce if the price of chairs was 1 000 and the price of tables was 1 Chairs 16 Tables 0 Consequently how many chairs and tables would society produce if the price of chairs was 1 000 and the price of tables was 1 Chairs 64 Tables 0 How many chairs and tables would Dan produce if the price of tables was 750 and the price of chairs was 2 Chairs 0 Tables 8 6 How many chairs and tables would Leslie produce if the price of tables was 750 and the price of chairs was 2 Chairs 0 Tables 24 Consequently how many chairs and tables would society produce if the price of tables was 750 and the price of chairs was 2 Chairs 0 Tables 32 If Pc Pt 4 so chairs sell at 4x the price of tables how many chairs and tables will Dan produce Chairs 48 Tables 0 If Pc Pt 4 so chairs sell at 4x the price of tables how many chairs and tables will Leslie produce Chairs 16 Tables 0 Consequently if Pc Pt 4 so chairs sell at 4x the price of tables how many chairs and tables will society produce Chairs 64 Tables 0 7 At what price ratio Pc Pt will Dan be indifferent between producing chairs and tables Pc Pt 1 6 If Pc Pt 1 6 so chairs sell at 1 6 the price of tables how many chairs and tables will Dan produce Chairs 0 x 48 Tables 8 x 6 If Pc Pt 1 6 so chairs sell at 1 6 the price of tables how many chairs and tables will Leslie produce Chairs 0 Tables 24 Consequently if Pc Pt 1 6 so chairs sell at 1 6 the price of tables how many chairs and tables will society produce Chairs 0 x 48 Tables 32 x 6 At what price ratio Pc Pt will Leslie be indifferent between producing chairs and tables 3 2 If Pc Pt 3 2 so chairs sell at 3 2 the price of tables how many chairs and tables will Dan produce Chairs 48 Tables 0 8 If Pc Pt 3 2 so chairs sell at 3 2 the price of tables how many chairs and tables will Leslie produce Chairs 16 2 3X Tables 0 X 24 Consequently if Pc Pt 3 2 so chairs sell at 3 2 the price of tables how many chairs and tables will society produce Chairs 64 2 3X Tables 0 X 24 If Pc Pt 2 3 so chairs sell at 2 3 the price of tables how many chairs and tables will Dan produce NOTE THAT 1 6 2 3 3 2 Chairs 48 Tables 0 If Pc Pt 2 3 so chairs sell at 2 3 the price of tables how many chairs and tables will Leslie produce Chairs 0 Tables 24 Consequently if Pc Pt 2 3 so chairs sell at 2 3 the price of tables how many chairs and tables will society produce Chairs 48 Tables 24 9 If Pc Pt 1 6 how many chairs and tables will Dan produce Chairs 0 Tables 8 If Pc Pt 1 6 how many chairs and tables will Leslie produce Chairs 0 Tables 24 Consequently if Pc Pt 1 6 how many chairs and tables will society produce Chairs 0 Tables 32 If Pc Pt 3 2 how many chairs and tables will Dan produce Chairs 48 Tables 0 If Pc Pt 3 2 how many chairs and tables will Leslie produce Chairs 16 Tables 0 Consequently if Pc Pt 3 2 how many chairs and tables will society produce Chairs 64 Tables 0 10 Fill in this table The productions are listed as …