Question
Simone and Ana are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza
Simone and Ana 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. Simone takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Ana takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza.
1. Simone's opportunity cost of brewing a gallon of root beer is______ , and Ana's opportunity cost of brewing a gallon of root beer is________ .
2.__________has an absolute advantage in brewing root beer, and__________ has a comparative advantage in brewing root beer.
3. If Simone and Ana trade foods with each other,________ will trade pizza in exchange for root beer.
4. 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_______ of root beer, and the lowest price that makes both roommates better off is________ of root beer per pizza.
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