Question

Assume that quantities do not need to be integers. That is, it is feasible for Andreas to knit 37.5 mittens. You have two employees, Meb and Des, each of whom works for 10 hours a day. Meb can knit 5.8 mittens in an hour. Meb can knit 2 scarves in an hour. Des can knit 1.1 mittens in an hour. Des can knit 1 scarf in an hour. If they are efficiently knitting 15 scarves a day, what is the opportunity cost, in terms of mittens per day of producing an extra scarf each day, Enter a number and only a number, no units) rounded to two decimal places. If your answer is 1.275, enter 1.28

Answer 1

Given, there are two employees Meb and Des

Hours available = 10 each

Meb:

Mittens 5.8 per hr or

Scarves 2 per hr

Des:

Mittens 1.1 per hr or

Scarves 1 per hr

Total production in a day: They can produce all of any or a combination of both.

Mittens:

Meb = 5.8*10=50

Des= 1.1*10=11

Total = 61 i.e, 61/10=6.1 per hour

Scarves:

Meb=2*10=20

Des= 1*10=10

Total =30 i.e, 30/10=3 per hour

It is given that they are efficiently producing 15 Scarves a day.Requirement is to find the opportunity cost in terms of mittens per day, of producing an extra scarf each day.

They are producing 15 Scarves, that means they use 15/3 = 5 hrs to produce 15 scarves combined

Balance hrs available = 10+10-5=15 hrs

Mittens that can be produced with 15 hrs = 6.1*15 = 91.5

If extra 1 scarf is to be produced, it will take

1 hr/ 3per hr = 0.33 hrs

With 0.33 hrs, 6.1 * 0.33 = 2.01 units of mittens can be produced. Thus opportunity cost in terms of mittens per day = 2.01 mittens