Bill and Hillary produce food and clothing. In an hour, Bill can produce 1 unit of food or 1 unit of clothing, while Hillary can produce 2 units of food or 3 units of clothing. They each work 10 hours a day.
1.Draw the PPF for the household assuming that each spends the same number of hours each day as the other producing food and clothing.
2. Hillary suggests she specialize in making clothing. She will do all the clothing production for the family; however, if all her time is devoted to clothing and they still want more, then Bill can help with clothing production. What does the household PPF look like now?
3. Bill suggests that Hillary specialize in producing food. Hillary will do all the food production for the family; however, if all her time is devoted to food and they still want more, then Bill can help with food production. What does the household PPF look like under Bill’s proposal?
4. Comparing your answers to parts c, d, and e, which allocation of time makes the most sense? Relate your answer to the theory of comparative advantage