In Narnia, One Binky Can Be Produced with Two Workers

question 114

Essay

In Narnia, one binky can be produced with two workers and one sippy cup can be produced with 0.25 workers. In Bedrock, one binky can be produced with one worker and one sippy cup can be produced with 0.50 workers.
a. What is the opportunity cost of producing one sippy cup in Narnia and in Bedrock?
b. Which country has the comparative advantage in sippy cups?
c. Suppose that each country has 100 workers and completely specializes in its comparative advantage. How many units of output of sippy cups and binkys will each country produce?
d. Before trade, Narnia produces 25 binkys and 200 sippy cups, and Bedrock produces 50 binkys and 100 sippy cups. Show how specialization and free trade can make each country better off than it was before the trade situation.

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Definitions:

Milgram's Research

A series of social psychology experiments in the 1960s that studied obedience to authority figures.

Learner Made Mistake

A situation where a person who is in the process of learning something does something incorrectly.

Informational Influence

A social psychology concept where an individual conforms to the opinions or behaviors of a group, believing the group has accurate information.

Social Pressure

The influence exerted by a social group or society on an individual to change their behavior, values, or beliefs to conform to group norms.