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Attempts :l:l:| Keep the Highest I 4 3. Opportunity Cost Kate and Poornima are roommates. They spend most of their time studying (of course), but
Attempts :l:l:| Keep the Highest I 4 3. Opportunity Cost Kate and Poornima 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. Kate takes 5 hours to brew a gallon of root beer and 3 hours to make a pizza. Poornima takes 8 hours to brew a gallon of root beer and 4 hours to make a pizza. Kate's opportunity cost of making a pizza is V of root beer, and Poornima's opportunity cost of making a pizza is V of root beer. V has an absolute advantage in making pizza, and V has a comparative advantage in making pizza. If Kate and Poornima trade foods with each other, V will trade 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 V of root beer, and the lowest price that makes both roommates better off is V of root beer per pizza
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