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Wed 19 Jan, 2011 12:50 am
It takes John 1 hour to produce one widget and 2 hours to produce one shirt. It takes Ashley 3 hours to produce one widget and 2 hours to produce one shirt. John and Ashley both consume 1 widget and 1 shirt.
Assume John specializes in producing widgets and Ashley specializes in producing shirts. Assume they engage in trade. One widget costs $1 and one shirt costs $1. Both John and Ashley each need to consume one widget and one shirt. How long must John work to obtain his consumption bundle? How about Ashley?