3. Opportunity Cost Becky and Eileen are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Becky takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Eileen takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. Becky's opportunity cost of making a pizza is of root beer, and Eileen's opportunity cost of making a pizza is of root beer. has an absolute advantage in making pizza, and has a comparative advantage in making pizza. Ir Becky and Eileen trade foods with each other, will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is of root beer, and the lowest price that makes both roommates better off is of root beer per pizza.
3. Opportunity Cost Becky and Eileen are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Becky takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Eileen takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. Becky's opportunity cost of making a pizza is of root beer, and Eileen's opportunity cost of making a pizza is of root beer. has an absolute advantage in making pizza, and has a comparative advantage in making pizza. Ir Becky and Eileen trade foods with each other, will trade away pizza in exchange for root beer. The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is of root beer, and the lowest price that makes both roommates better off is of root beer per pizza.
Chapter2: Economic Tools And Economic Systems
Section: Chapter Questions
Problem 3.5P
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Transcribed Image Text:3. Opportunity Cost
Becky and Eileen are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making
pizza and brewing root beer. Becky takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Eileen takes 6 hours to brew a gallon of
root beer and 4 hours to make a pizza.
Becky's opportunity cost of making a pizza is
of root beer, and Eileen's opportunity cost of making a pizza is
of root beer.
has an absolute advantage in making pizza, and
has a comparative advantage in making pizza.
Ir Becky and Eileen trade foods with each other,
will trade away pizza in exchange for root beer.
The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates
better off is
of root beer, and the lowest price that makes both roommates better off is
of root beer per pizza.
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