Question

Answer 1

(A) Lawn mowed by Andrew, Darnell and Jacques = 2 x 10 hours + 1 x 10 + 1 x 10 = 20 + 10 + 10 = 40

(B) Car washed by all = 1 x 10 + 1 x 10 + 2 x 10 = 40

(C) Lawn mowed = 2 x 5 hours + 1 x 5 + 1 x 5 = 10 + 5 + 5 = 20

Car washed = 1 x 5 hours + 1 x 5 + 2 x 5 = 20

(D) Lawn mowed = 2 x 5 hours + 1 x 10 hours = 20

Car washed = 1 x 5 + 1 x 10 = 15

Opportunity cost is the value of next best alternative foregone.

1. Andrew:

1 car wash = 2 lawn mowed

It implies opportunity cost of washing car is 2 Lawn mowed.

2. Darnell:

1 car wash = 1 lawn mowed

Opportunity cost of 1 car wash is 1 lawn mowed.

3. Jacques:

2 car wash = 1 lawn mowed

1 car wash = 1/2 = 0.5 lawn mowed

Opportunity cost is 0.5 lawn mowed.

50 T PPF Σ 30 e 20 10 0 5 10 20 25 30 35 40 45 50 Quantity af Cars Washed

True.

A, B, C - These are efficient because lie on the PPF.

D is inefficient because it lies below PPF which means some resources are left idle.