1. Jane's Island's production possibilities are given in the Corn table to the right. a. Draw a graph of the production possibility possibilities frontier on Jane's Island. (pounds per month) Cloth (yards per month) 3.0 and 0 b. What are Jane's opportunity costs of producing corn and cloth at each output in the table? 2.0 and 2 1.0 and 4 0 and 6 2. 3. 4. In problem 1, Jane is willing to give up 0.75 pounds of corn per yard of cloth if she has 2 yards of cloth; 0.50 pounds of corn per yard of cloth if she has 4 yards of cloth; and 0.25 pound of corn per yard c cloth if she has 6 yards of cloth. a. Draw a graph of Jane's marginal benefit from corn. b. What is Jane's efficient quantity of corn? Joe's production possibilities are given in the table to the right. What are Joe's opportunity costs of producing corn and cloth at each output in the table? In problems 1 and 2, Jane's Island produces and consumes 2 pounds of corn and 2 yards of cloth. Joe's Island produces and consumes 2 pounds of corn and 2 yard of cloth. Now the islands begin to trade. Corn (pounds per Cloth (yards month) per month) 6 and 0 4 and 1.0 2 and 2.0 a. What good does Jane sell to Joe and what good does Jane buy from Joe? 0 and 3.0 b. If Jane and Joe divide the total output of corn and cloth equally, what are the gains from trade?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 4PA

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I am in need of a step by step way to nail this solution down for all parts. I understand how to get opportunity costs, and how to find the comparative advantage. But I'd like to see how that is applied here. Part 2 is especially difficult for me. Please help me with this so I can include the process in my study guide. Thank you so much!

a. Draw a graph of the production possibility possibilities
frontier on Jane's Island.
1.
Jane's Island's production possibilities are given in the
table to the right.
Corn
(pounds per
month)
Cloth
(yards per
month)
3.0
and
0
2.0
and
1.0
and
2.
0
and
246
3.
4.
b. What are Jane's opportunity costs of producing corn
and cloth at each output in the table?
In problem 1, Jane is willing to give up 0.75 pounds of
corn per yard of cloth if she has 2 yards of cloth; 0.50
pounds of corn per yard of cloth if she has 4 yards of cloth; and 0.25 pound of corn per yard c
cloth if she has 6 yards of cloth.
a. Draw a graph of Jane's marginal benefit from corn.
b. What is Jane's efficient quantity of corn?
Joe's production possibilities are given in the table to
the right. What are Joe's opportunity costs of
producing corn and cloth at each output in the table?
In problems 1 and 2, Jane's Island produces and
consumes 2 pounds of corn and 2 yards of cloth. Joe's
Island produces and consumes 2 pounds of corn and 2
yard of cloth. Now the islands begin to trade.
Corn
(pounds
per
Cloth
(yards
month)
per
month)
6
and
0
4
and
1.0
2
and
2.0
a.
What good does Jane sell to Joe and what good does
Jane buy from Joe?
0
and
3.0
b. If Jane and Joe divide the total output of corn and cloth equally, what are the gains from
trade?

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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