In One Day, John Can Make 100 of Good X

question 102

Essay

In one day, John can make 100 of good X or 50 of good Y. In the same period Lucy can make 40 of good X and 80 of good Y.
a. If both people used half their time to make good X, what is the total amount of X that would be made?
b. Suppose the person with the comparative advantage in X reduced production by one unit of Y to make more X. Suppose that the person with the comparative advantage in Y reduced production of by one unit of X. How does the total production of X change compared to (a)?

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Definitions:

Bias

A tendency to lean in a certain direction, either in favor of or against a particular thing, person, or group compared with another, often in a way considered to be unfair.

Journalizing

The process of recording a transaction entry into the journal.

Business Transactions

Financial activities or exchanges involving the transfer of value between entities or parties, affecting the financial position of a business.

Journal

A listing of business transactions in chronological order. The journal links on one page the debit and credit parts of transactions. Alternatively known as general journal.