dianaarcos2675
22.09.2020 •
Business
Suppose there are two individuals, Casey and Rick, who live in a very simplified world where only two goods are produced and consumed: steak and potatoes. The production opportunity cost for Casey is 5.00 kg of steak for every kilogram of potatoes. Rick has a production opportunity cost of 3.00 kg of steak for every kilogram of potatoes. Casey eventually realizes that, through trade, both individuals can be better off. Rick is willing to trade. What price can be settled between these two parties such that both individuals can enjoy more steak and potatoes
Solved
Show answers
More tips
- L Leisure and Entertainment What Movies You Should Watch: A Guideline to Make the Right Decision...
- F Family and Home How to Choose a Baby Stroller: Tips from Experienced Parents...
- H Health and Medicine 5 Simple Steps to Quit Smoking for Good...
- C Computers and Internet How to Download Videos from YouTube? Simple Steps to Download Any Content...
- H Health and Medicine What is the Normal Blood Sugar Level in a Healthy Person?...
- S Style and Beauty How to Get Rid of Acne: Scientifically Proven Methods...
- L Leisure and Entertainment How to Choose the Perfect Gift for Men on February 23rd?...
- C Computers and Internet How to Delete Your Account on Odnoklassniki...
- H Health and Medicine 10 Simple and Effective Tips on How to Lose Weight in a Week...
- F Food and Cooking What s the Best Rice for Cooking Plov?...
Answers on questions: Business
- P Physics When a 12 V battery is connected to a 6 uF capacitor, how much energy is stored...
- H History How have mail in ballots affected Donald Trump s chances of winning or losing the election?...
- H History from Spain and the United States needed to agree on the border between the two countries. a. Colonists b. Presidents c. Diplomats d. Lieutenants Please select the best answer...
- M Mathematics 2x+-2y=14 x+4y=13 Elimination Method to Solve Linear Equations...
Ответ:
Casey's opportunity cost of producing 1 kg of potatoes is 5 kg of steak.
Casey's opportunity cost of producing 1 kg of steak is 0.2 kg of potatoes.
Rick's opportunity cost of producing 1 kg of potatoes is 3 kg of steak.
Rick's opportunity cost of producing 1 kg of steak is 0.33 kg of potatoes.
Casey should produce steak while Rick should produce potatoes, since Rick has a comparative advantage in producing potatoes (lower opportunity cost) and Casey has a comparative advantage in producing steak.
As long as the price of steak per kilogram of potatoes is less than 5 kg of steak and more than 3 kg of steak, then both would win. In order for both of them to win is a similarly proportional way, the exchange price should be 4 kg of steak per kg of potatoes.
Ответ:
close friends i guess
Explanation: