ECO101- Microeconomics Assignment

Running head: ECONOMIC ASSIGNMENT
Economic Assignment
Name of the Student
Name of the University
Author note

2ECONOMIC ASSIGNMENT
Table of Contents
Answer 1..........................................................................................................................................3
Answer 2..........................................................................................................................................6
Answer 3..........................................................................................................................................6
Answer 4..........................................................................................................................................8
References......................................................................................................................................12

3ECONOMIC ASSIGNMENT
Answer 1
1.a)
i) The maximum kilogram of coffee Jara can pick by investing all the 6 hours in coffee is
(4*6)=24. Similarly the maximum kilogram of coffee that Peng can pick is (2*6)= 12.
Therefore, the maximum kilograms of coffee the two can pick in a day is (24+12) units= 26
units.
ii) The maximum kilogram of nuts Jara can pick by investing all the 6 hours in coffee is (2*6) =
12. Similarly the maximum kilogram of coffee that Peng can pick is (4*6)= 24
Therefore, the maximum kilograms of coffee the two can pick in a day is (12+24) units= 26
units.
iii) By investing 1 hour Jara can produce only 2 kilograms of nuts. Therefore, to pick 4
kilograms of nuts Jara has to spend 2 hours. For Peng, only 1 hour is sufficient for picking 4
kilograms of nuts. Therefore, when they decided of picking maximum number of kilograms of
coffee and start picking with 4 kilogram of nuts it will be an optimal decision for Peng to pick up
nuts because Peng has a comparative advantage in picking nuts (Feenstra 2015). The kilograms
of coffee they would still able to pick is- (4*6) + (5*2)= 34 kilogram.
iv) In order to produce 4 kilograms of coffee jara need only one hour whereas Peng need 2 hours.
This indicates Jara has a comparative advantage in producing coffee. Thus, when they decided of
choosing maximum number of nuts and starts with picking 8 kilograms of coffees, Jara would
pick coffee.

4ECONOMIC ASSIGNMENT
Number of kilograms of nuts they would still be able to pick is (2*4) + (4*6)= 32 kilogram.
v) Yes, it is possible for Jara and Peng to pick a total of 26 kilograms of nuts and 20 kilograms of
coffee each day. Since, Jara has a comparative advantage in Coffee he has to produce he needs
to produce more coffee and Peng needs to produce more nuts. In order to have 26 kilogram of
coffee Jara invests 5 hours and produces 20 kilogram of coffee and using rest of the 1 hour Jara
produces 2 kilogram of nuts. Peng produces 24 kilogram of nuts using all the 6 hours, making
(2+24)= 26 kilogram nuts attainable in a day.
b)i) Yes, 30 kilograms of coffee per day and 12 kilograms of nuts is an attainable point. In this
situation, Jara uses all the 6 hours in producing a total of (4*6)=24 kilograms of coffee. The rest
(30-24)=6 kilograms of coffee will be produced by Peng using 3 hour. In the rest of the 3 hours
Peng produces (4*3)= 12 kilogram of nuts. 24 kilograms of coffee and 24 kilograms of nuts per
day is also a feasible and efficient point (Laursen 2015.). Here Jara choose to pick 24 kilograms
of coffee and Peng picks 24 kilograms of nuts on a day.
ii)