QUESTION 7 Olivia and Susan operate a store that sells burritos. There are two main activities: chopping up the ingredients and then cooking the fillings for the burritos. Olivia and Susan are deciding who should chop the ingredients and who should cook the fillings in order to maximise output. Olivia Susan Chopped Food (kg/hr) 15 20 Cooked Food (kg/hr) 20 30 Which of the following statements are true: For Olivia, the opportunity cost of 1kg of cooked food is 1.33kgs (to 2 decimal places) of choppectood. For Susan, the opportunity cost of 1kg of cooked food is 0.67kgs (to 2 decimal places) of chopped food. Susan should specialise in chopping. Olivia has an absolute advantage in chopping.
QUESTION 7 Olivia and Susan operate a store that sells burritos. There are two main activities: chopping up the ingredients and then cooking the fillings for the burritos. Olivia and Susan are deciding who should chop the ingredients and who should cook the fillings in order to maximise output. Olivia Susan Chopped Food (kg/hr) 15 20 Cooked Food (kg/hr) 20 30 Which of the following statements are true: For Olivia, the opportunity cost of 1kg of cooked food is 1.33kgs (to 2 decimal places) of choppectood. For Susan, the opportunity cost of 1kg of cooked food is 0.67kgs (to 2 decimal places) of chopped food. Susan should specialise in chopping. Olivia has an absolute advantage in chopping.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Consumers, Producers, And The Efficiency Of Markets
Section: Chapter Questions
Problem 8PA
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