Question

Problems and Applications Q3 Frances and Latasha are roommates. They spend most of their time studying...

Problems and Applications Q3

Frances and Latasha 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. Frances takes 5 hours to brew a gallon of root beer and 3 hours to make a pizza. Latasha takes 8 hours to brew a gallon of root beer and 4 hours to make a pizza.

Frances's opportunity cost of brewing a gallon of root beer is   , and Latasha's opportunity cost of brewing a gallon of root beer is   .

  has an absolute advantage in brewing root beer, and   has a comparative advantage in brewing root beer.

If Frances and Latasha 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.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

France:

Opportunity cost of brewing a gallon of beer = 5/3 = 1.67 pizza

Latasha:

Opportunity cost of brewing a gallon of beer = 8/4 = 2 pizza

---

Comparative advantage in beer = One who has lower opportunity cost of brewing beer = France

Absolute advantage in beer = France

Reason: Suppose there are 120 hours available for work.

France will produce = 120/5 = 24 beer while Latasha will produce = 120/8 = 15 beer

----

Latasha will trade away pizza for root beer.

Reason: Since Latasha has comparative advantage in pizza production, she will produce pizza and sell it in exchage for beer

----

Highest price: 2 pizza

Lowest price: 1.67 pizza

Add a comment
Answer #2
Frances and Latasha 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. Frances takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Latasha takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza. Frances's opportunity cost of making a pizza is 2/3 gallon    of root beer, and Latasha's opportunity cost of making a pizza is5/7 gallon of root beer. Frances has an absolute advantage in making pizza, and Frances has a comparative advantage in making pizza. 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 5/7 gallon  of root beer, and the lowest price that makes both roommates better off is 2/3 gallon of root beer per pizza. If Frances and Latasha trade foods with each other, Frances will trade away pizza in exchange for root beer.
source: Cengage
answered by: Purple Hyacinth01
Add a comment
Know the answer?
Add Answer to:
Problems and Applications Q3 Frances and Latasha are roommates. They spend most of their time studying...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 3. Problems and Applications Q3 Caroline and Frances are roommates. They spend most of their time...

    3. Problems and Applications Q3 Caroline and Frances 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. Caroline takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Frances takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza. of root beer, and Frances's opportunity cost of making a...

  • 3. Problems and Applications 93 of course), but they leave some time for their favorite Frances...

    3. Problems and Applications 93 of course), but they leave some time for their favorite Frances and Latasha are roommates. They spend most of their time studying ( activities: making pizza and brewing root beer. Frances takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Latasha takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza Frances's opportunity cost of making a pizza is of...

  • 9. Problems and Applications Q3 Pat and Kris are roommates. They spend most of their time...

    9. Problems and Applications Q3 Pat and Kris 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. Pat takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Kris takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. Pat's opportunity cost of making a pizza is 1/2 gallon...

  • Amy and Deborah are roommates. They spend most of their time studying (of course), but they...

    Amy and Deborah 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. Amy takes 5 hours to brew a gallon of root beer and 3 hours to make a pizza. Deborah takes 8 hours to brew a gallon of root beer and 4 hours to make a pizza. Amy's opportunity cost of brewing a gallon of root beer is ------ , and Deborah's...

  • 3. Problems and Applications Q3 Hilary and Maria are roommates. They spend most of their time...

    3. Problems and Applications Q3 Hilary and Maria 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. Hilary takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Maria takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza Hilary's opportunity cost of making a pizza is of root...

  • Graded Attempts: Score: /4 3. Problems and Applications Q3 Kyoko and Rina are roommates. They spend...

    Graded Attempts: Score: /4 3. Problems and Applications Q3 Kyoko and Rina 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. Kyoko takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Rina takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza. Kyoko's opportunity cost of makinht pizza...

  • 3. Problems and Applications 93 Simone and Ana are roommates. They spend most of their time...

    3. Problems and Applications 93 Simone and Ana 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. Simone takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Ana takes 6 hours to brew a gallion of root beer and 4 hours to make a pizza Simone's opportunity cost of making a pizza is is of...

  • Attempts Average: 14 3. Problems and Applications Q3 are roommates. They spend most of their tme...

    Attempts Average: 14 3. Problems and Applications Q3 are roommates. They spend most of their tme studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Rina takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza, Yvette takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza. Rina's opportunity cost of making root beer. is g a...

  • Attempts: Keep the Highest: 4 3. Problems and Applications Q3 Teresa and Beth are roommates. They...

    Attempts: Keep the Highest: 4 3. Problems and Applications Q3 Teresa and Beth 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. Teresa takes 5 hours to brew a gallon of root beer and 3 hours to make a pizza. Beth takes 8 hours to brew a gallon of root beer and 4 hours to make a pizza. Teresa's opportunity cost of brewing...

  • Exercise 2 Pat and Kris are roommates. They spend most of their time studying (of course),...

    Exercise 2 Pat and Kris 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. Pat takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Kris takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. What is each roommate's opportunity cost of making a pizza? Who has the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
Active Questions
ADVERTISEMENT