Diego and Darnell 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. Diego takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Darnell takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza.   a.What is each roommate’s opportunity cost of making a pizza? Who has the absolute advantage in making pizza? Who has the comparative advantage in making pizza? b. If Diego and Darnell trade foods with each other, who will trade away pizza in exchange for root beer

Brief Principles of Macroeconomics (MindTap Course List)
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ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains Rrom Trade
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Diego and Darnell 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. Diego takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Darnell takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza.

 

a.What is each roommate’s opportunity cost of making a pizza? Who has the absolute advantage in making pizza? Who has the comparative advantage in making pizza?

b. If Diego and Darnell trade foods with each other, who will trade away pizza in exchange for root beer?

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