Part 2.

Note: An example of how to make these calculations is provided in the Unit I videos "Opportunity Cost" and "Law of Comparative Advantage"

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 amount 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:
	Bags of Popcorn Made
	Hot Dogs Made
=
	For every 1 hot dog Tyson makes, he sacrifices		bags of popcorn.

Ella:
	Bags of Popcorn Made
	Hot Dogs 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