Question:

# Krisha can pick 4 pounds of coffee beans in an hour or

Last updated: 1/30/2024

Krisha can pick 4 pounds of coffee beans in an hour or gather 2 pounds of nuts Tom can pick 2 pounds of coffee beans in an hour or gather 4 pounds of nuts Each works 6 hours per day Assume that Tom and Krisha specialize according to their comparative advantage to produce coffee beans and nuts a Suppose that Krisha and Tom could buy or sell coffee beans and nuts in the world market at a price of 2 per pound for coffee beans and 2 per pound for nuts If each person specialized completely in the good for which he or she had a comparative advantage how much could they earn by selling all they produce Tom s earnings plus Krisha s earnings 36 per day b At the prices just described what is the maximum amount of coffee beans Krisha and Tom could buy each day in the world market with the income they earned The maximum amount of nuts Maximum amount of coffee beans that could be bought each day 36 pounds Maximum amount of nuts that could be bought each day 36 pounds wwwwwwwwwww Using the world market and the prices described above would it be possible for Krisha and Tom to consume 40 pounds of nuts and 8 pounds of coffee beans each day Yes c In light of their ability to buy and sell in world markets at the stated prices on the same graph as their PPC show all of the combinations of the two goods it would be possible for them to consume This is also known as their consumption possibilities curve