Topics: Petroleum, Economics, Comparative advantage Pages: 2 (394 words) Published: March 9, 2015
﻿Name:____________________________

Directions: For each constant cost problem below, answer the following questions after creating a cost ratio table: 1. Does Output vary or does Input vary in this problem?
2. Who has the absolute advantage for the first product?
3. Who has a comparative advantage for the first product? (The first product mentioned.) 4. Who has a comparative advantage for the second product?

Remember : When the problem is stated in terms of the final OUTPUT, cross multiply and take the larger
When the problem is stated in money terms or units of INPUT, cross multiply and take smaller

1.Joy gives 2 haircuts or one perm in an hour. Susie gives 3 haircuts or 2 perms in an hour.

2. George fixes 16 flats or 8 brakes per day. Amy fixes 12 flats or 8 brakes per day.

3.Ana takes 30 minutes to wash the dishes and one hour to vacuum the house. Her husband, Joe, takes 15 minutes to wash the dishes and 45 minutes to vacuum the house.

4.Texans require 10 labor hours per unit of beef produced and 30 labor hours per unit of cotton produced. Virginians require 15 labor hours per unit of beef and 60 hours per unit of cotton.

5.Spaniards can produce 10 gallons of wine or 5 gallons of olive oil per worker hour. Americans can produce 9 gallons of wine or 3 gallons on olive oil per worker hour.

6.It takes Canadians 6 hours to produce one unit of calculators and 4 hours to produce one unit of backpacks. It takes Japanese 2 hours to produce the calculators and 3 hours to produce the backpacks.

7. Americans produce 50 computers or 50 TV’s per million hours of labor. Chinese produce 30 computers or 40 TV’s per million hours of labor.

8.Refinery EM can produce 22 gallons of gasoline or 11 gallons of flight fuel per barrel of crude oil. Refinery CG can produce 18 gallons of gasoline...