Background Information

As mentioned in Part 1 of this assignment, Tyson and Ella work at Ruby Red Movie Theater. Tyson can produce 100 bags of popcorn or 50 hot dogs in one hour. His coworker, Ella, can produce 100 bags of popcorn or 30 hot dogs in an hour. Answer the following five questions based on this information. Remember to show your work.

Production By

Hourly Production

Tyson

Ella

Bags of Popcorn

Or

100

100

Hot Dogs

50

30

Part 2A

If Tyson and Ella attempted to produce both popcorn and hot dogs, how many bags of popcorn and hot dogs could each produce individually per hour? What would be the total number of bags of popcorn and hot dogs produced per hour by the two workers combined? (Show your work below.)

Each Trying to Produce Both

Production of Popcorn

Production of Hot Dogs

Tyson

Ella

+

+

Total

Part 2B

Calculate the opportunity cost of producing bags of popcorn for each worker. (Show your work.)

Opportunity Cost of Popcorn

Tyson:

Hot Dogs Made

Bags of Popcorn Made

=

For every 1 bag of popcorn Tyson makes, he sacrifices

hot dogs.

Ella:

Hot Dogs Made

Bags of Popcorn Made

=

For every 1 bag of popcorn Ella makes, she sacrifices

hot dogs.

Opportunity Cost of Producing Popcorn

Tyson

Ella

Question

Answer

(Tyson or Ella)

Who has lowest opportunity cost of producing popcorn?

Part 2C

Calculate the opportunity cost of producing hot dogs for each worker. (Show your work.)

Opportunity Cost of Hot Dogs

Tyson:

Hot Dogs Made

Bags of Popcorn Made

=

For every 1 hot dog Tyson makes, he sacrifices

bags of popcorn.

Ella:

Hot Dogs Made

Bags of Popcorn Made

=

For every 1 hot dog Ella makes, she sacrifices

bags of popcorn.

Opportunity Cost of Producing Hot Dogs

Tyson

Ella

Question

Answer

(Ella or Tyson)

Who has lowest opportunity cost of producing hot dogs?

Part 2D

Determine how many bags of popcorn should be produced per hour by each worker. (Show your work).

Who should specialize in producing popcorn?

Who should specialize in producing hot dogs?

Specialization

Production of Bags of Popcorn

Production of Hot Dogs

Tyson

Ella

Total Production With Specialization

Total Without Specialization

Difference

Part 2E

What potential ethical issues could arise from making the decision to have both employees specialize in producing popcorn or hot dogs? Name and explain at least two issues.