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Questions and Answers
Which of the following is/are true? (Select all that apply)
Which of the following is/are true? (Select all that apply)
- Robinson can produce coconuts at a relatively lower opportunity cost compared to Friday. (correct)
- If Robinson and Friday both use the same (positive) number of hours of labor to harvest coconuts, Friday will always be able to harvest more.
- Robinson and Friday both get tired (less productive) as they spend more time to produce more coconuts.
- Friday can produce coconuts at a relatively lower opportunity cost compared to Robinson. (correct)
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Study Notes
Production Functions
- Robinson's coconut production function is $C_{Robinson} = \frac{1}{4} \sqrt{L_C}$
- Friday's coconut production function is $C_{Friday} = \frac{1}{2} \sqrt{L_C}$
Comparative Advantage
- Friday has a comparative advantage in coconut production compared to Robinson. This is because for the same amount of labor, Friday produces more coconuts than Robinson.
Opportunity Cost
- Robinson can produce coconuts at a lower opportunity cost compared to Friday. This means that Robinson gives up less fish (or other goods) to produce an additional coconut compared to Friday.
Labor Input and Output
- If Robinson and Friday use the same positive number of labor hours to harvest coconuts, Friday will always be able to harvest more coconuts than Robinson.
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