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How can the calculate the opportunity cost for the following question:
Tom can produce either 5 kites and 3 jigsaw puzzles an hour or 3 kites and 4 jigsaw puzzles an hour. Tessa can produce either 6 kites and 2 jigsaw puzzles an hour or 2 kits and 5 jigsaw puzzles and hour.a. Calculate Tom's opportunity cost of a kite:
b. Calculate Tessa's Opportunity cost of a kite:
c. Who has a comparative advantage in producing kites?
d. Who has a comparitive advantage in jigsaw puzzles?
e. If Tom and Tessa specialize in producing the good in which they enjoy a comparative advantage, what are the quantities of jigsaw puzzles and kites produced?
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How could we argue that these markets are notcompetitive and could each firm face a demand curve that is not perfectly elastic?
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