ITESM

ECON MISC

Answer using the
following information:
Production
Kilograms of salt in 9 hours Kilograms of sugar in 9 hours
Ramón 133 193.33
Pável 506 324
a. Calculate the opportunity cost of producing salt for Ramón.
OC = 193.33/133 = 1.453
b. Compute the opportunity cost of producing sugar for Ramón.
OC = 133/193.33 = 0.6879
c. Calculate the opportunity cost of producing salt for Pável.
OC = 324/506 = 0.6403
d. Compute the opportunity cost of producing sugar for Pável.
OC = 506/324 = 1.5617
e. Who has a comparative advantage in producing salt and why?
Pavel has a comparative advantage in salt production, because it has the lower
opportunity cost.
f. Who should specialize in producing salt and why?
Its Pavel, because it would cost him less, because of the lower opportunity cost to
get specialized in salt.
g. Who has a comparative advantage in producing sugar and why?
Ramon has the comparative advantage in sugar, because he has the lowest
opportunity cost.
h. Who should specialize in producing sugar and why?
Its Ramon who should specialize, because it would cost less to him, because of his
lower opportunity cost to produce sugar.
2. Answer using the following information: