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Beth and Eleanor are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza
Beth and Eleanor 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. Beth takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Eleanor takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. Beth's opportunity cost of making a pizza is 2 gallons of root beer, and Eleanor's opportunity cost of making a pizza is of root beer. has an absolute advantage in making pizza, and has a comparative advantage in making pizza. If Beth and Eleanor trade foods with each other, will trade away 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 of root beer per pizza. Grade It Now Save & Continue Continue without saving
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