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.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
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.
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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Production Possibility Frontier
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education