Question

Fill in the blank:

1) In a given amount of time John can produce either 30 pounds of vegetables or 10 pounds of chicken. In the same amount of time George can produce either 25 pounds of vegetables or 5 pounds of chicken. In this simple economy if John and George decide to specialize and exchange with each other then we can expect one pound of chicken to trade for at least __?__ pounds of vegetables but not more than __?__ pounds of vegetables. Enter numerical values in each blank, rounded to two decimal places as necessary.

2) In one hour John can produce either 3 units of good X or 6 units of good Y. He works an 8 hour day. If he wants to produce 12 units of good Y then how many units of good X can he produce? Enter a whole number. Round to the nearest whole number as necessary. __________

3) In one day Sam can produce 40 salads or 32 sandwiches. What is the opportunity cost of producing 1 sandwich? Enter a number rounded to two decimal places as necessary. ________

Answer 1

1) opportunity cost of 1 pound of chicken (John) = 30/10 = 3 pounds of vegetables

Opportunity cost of 1 pound of chicken (George) = 25/5 = 5 pounds of vegetables

In this simple economy if John and George decide to specialize and exchange with each other then we can expect one pound of chicken to trade for at least 3 pounds of vegetables but not more than 5 pounds of vegetables.

2) Hours used for good Y = 12/6 = 2

Remaining hours = 6

Total production of good X = 6 x 3 = 18 units

3) the opportunity cost of producing 1 sandwich = 40/32 = 1.25 salads