Question

The Prodection Possibilities rontier Huey can wash 2 cars or mow 2 lawnms in one hour Louie can wash 4 ears or mow 2 lawns in one hour. Recall: opportunity cost is a measure of what you give up to get something. Based on the information above Huey's opportunity cost of mowing 1 lawn is washed cars Dewey's opportunity cost of mowing I lawn iswashed cars 一一, washed cars Louie's opportunity cost of mowing 1 lawn is Suppose they cach work & hours in one day. Identify the total amount of each good produced assuming they each work the following combinations of hours A. 8 hours washing cars and 0 hours mowing lawns washed cars B. 0 hours washing cars and 8 hours mowing lawns washed cars mowed lawns C I worker mows lawns (the best one) and the other two wash cars washed cars mowed lawns D. 2 workers mow lawns (the best two) and the other one washes cars washed cars mowed lawns Graph the production possibilities frontier (lawns mowed on the horizontal axis please) and identify the four points from above (A, B, C, D)

Answer 1

Huey�s opportunity cost of mowing 1 lawn is 2/2 = 1 washed cars Dewey�s opportunity cost of mowing 1 lawn is 2/4 = 0.5 washed cars Louie�s opportunity cost of mowing 1 lawn is 4/2 = 2 washed cars A. Total washed cars = 8 times 2 + 8 times 2 + 8 times 4 = 64 0 mowed lawns B. 0 washed cars Total mowed lawns = 2 times 8 + 4 times 8 + 2 times 8 = 64 C. Best one to mow lawns is Dewey as he has lower opportunity cost of mowing lawns Total washed cars = 2 times 8 + 4 times 8 = 48 Total mowed lawns = 8 times 4 = 32 d. Huey & Dewey are the best two for mowing the lawns because they have lower opportunity cost of doing so, Total washed cars = 4 times 8 = 32 Total mowed lawns = 2 times 8