Question

1) Gavin uses labor to make pizza and TV. Gavin has 2400 units of labor and...

1) Gavin uses labor to make pizza and TV. Gavin has 2400 units of labor and needs 3 units to make a TV and 2 units to make one pizza.

a) If Gavin produced 0 TV how many pizzas could he make?

b) If Gavin made 0 pizza how many TVs could he make?

c) What is the opportunity cost of one pizza?

d) If Gavin made 600 pizzas could he also make 450 TVs?

e) If Gavin made 500 TVs could he make 450 pizzas?

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Homework Answers

Answer #1

Answer for a)

If Gavin produced 0 TV then he is left with 2400 units to produce Pizza. If 1 pizza takes 2 units then he would make 1200 pizzas

Answer for b)

If he makes no pizza then 2400 units will be utilized to make TV. If 1 TV takes 3 units then 2400/3 i.e. 800 TV will be produced

Answer for c)

IFf1 pizza is made then 2 units will be invested hence in 2 units we would have made 0.66 units of TV

Opportunity cost is 2/3 TV

Answer for d)

IF Gavin made 600 pizzas that is he has utlised 1200 units hnece in remaining 1200 units he can only make 400 units of TV not 450 TVs

Answer for e)

IF Gavin Makes 500 TVs then he has utilised 1500 units and in remaining 900 unnits he can make 450 pizzas

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