Your friend Taylor works producing dress shirts and dress pants. Currently Taylor can work a maximum of 8 hours per day. With the equipment Taylor has, and the current level of expertise, Taylor can finish either 10 shirts or 20 pairs of pants in an hour. This is true when Taylor is performing at full capacity. Meaning doing the best possible work.

1. What is the maximum number of shirts Taylor can make in a day?(10 points)

2. What is the maximum number of pants Taylor can make in a day?(10 points)

3. What is the opportunity cost of making one pair pants (in terms of the amount of shirts Taylor won't be able to make)? As an example, when you give up $20 dollars in exchange for 40 pencils, you can say that the "cost" per pencil was $0.50, because $20/40 = $0.50.(15 points)

4. What is the opportunity cost of making one shirt (in terms of the amount of pants Taylor won't be able to make)?(15 points)

5. Taylor's friend Alexis, can make 10 shirts or 30 pairs of pants in an hour. Who has a lower opportunity cost of making shirts? In other words, who has a comparative advantage in the production of shirts? Explain your rationale(15 points)

6. Imagine now, that Taylor and Alexis are the only 2 shirts and pants producers in their small town, how would you suggest that they spend their time at work to achieve the highest production of shirts and pants for the town? Explain your rationale.(15 points)

7. Imagine now, that Taylor completes a training that doubles Taylor's capacity to make both shirts and pants per hour. a) What is the maximum number of shirts Taylor can make in a day? b) What is the maximum number of pants Taylor can make in a day? c) What does that tell you about the value of training (human capital) in production?(15 points)

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USING GRAPHS TO INTERPRET INFORMATION

8. Which graph best illustrates all the possible maximum combinations of shirts and pants Taylor can produce in one day?(5 points)