Temple University
Department of Economics

Economics 92 Honors
Principles of Microeconomics

Homework 1
Production Possibilities and Comparative Advantage

Name

                     

Jay, Kay and Dee are stranded on an island in the South Pacific.  They must provide themselves with food and water.  The following table shows how many hours each person needs to produce one unit of water or one unit of food.  Each person can work for twelve hours.

  Production time for one unit of food Production time for one unit of water
Jay 1 hour 2 hours
Kay 2 hours 1 hour
Dee 4 hours 6 hours

1.  How much water can Jay produce?

2. How much food can Dee produce?

In the box next to each picture enter the name of the person to whom the production possibilities curve (PPF) belongs.

3. This PPF belongs to .

4. This PPF belongs to .

5. This PPF belongs to .

6. What is the greatest amount of water that the trio can produce?

7. What is the greatest amount of food that the trio can produce?

8. When the trio produces 14 units of water, how much food can they produce?

9. Who produces the food in question 8?

10. When the trio produces 15 units of food, how much water can they produce?

11. Who produces the water in question 10?

12. Suppose that production is as in question 10; 15 units of food and the maximum amount of water possible.  Dee suggests that they divide the output equally. Under this proposal Jay and Kay each get an amount of food equal to what each would have chosen if they had worked alone.  Which of them prefers the sharing arrangement to working alone?  Check the appropriate box(es):    Jay  Kay