Opportunity Cost, Absolute Advantage, Comparative Advantage, Production Possibility Frontier
Sage and Jeremy work in Teton Snow Shop. Work in the shop consists of waxing skis or snowboards. Each of them has 10 hours of working time each day. Sage takes 2.5 hours to wax a snowboard, while Jeremy needs 1 hour. It takes Sage 1.25 hours to wax a ski, while Jeremy needs 2 hours. Answer the following questions.
a. Assuming that shop manager assigns Sage to waxing snowboards, how many boards can he wax during his work shift? What if he is assigned to waxing skis instead?
b. Assuming that the shop manager assigns Jeremy to waxing snowboards, how many boards can he wax during his work shift? What if he is assigned to waxing skis instead?
c. Fill out the following table.
d. Who has the absolute advantage in waxing snowboards? Who has the absolute advantage in waxing skis?
e. Who has the comparative advantage in waxing snowboards? Who has the comparative advantage in waxing skis?
f. Sage has decided to work overtime. His work shift is now 15 hours per day. Does this change your answers to part (d) and (e)?
g. The shop manager has given new waxing equipment to Jeremy as a birthday present. It takes Jeremy half as much time to complete each task. Does this change your answers to part (d) and (e)?
Employee
Opportunity Cost of Waxing a Snowboard (in Terms of a Ski)
Opportunity Cost of Waxing a Ski (in Terms of a Snowboard)
Sage
Jeremy