Question

Winnie and Tigger both need to gather honey and also pick some berries. The following table describes how much each of them can accomplish in one hour if that hour is spent either picking berries or gathering honey:

Berries Picked in 1 Hour:

Honey gathered in 1 Hour:

Tigger: either 3 pints of Berries or 1 pint of Honey

Winnie: either 6 pints of Berries or 6 pints of Honey

(b) Demonstrate that they could both be made better off by trading tasks and specializing.

Please explain in long form.

Answer 1

Tigger can either gather 3 pints of Berries or 1 pint of Honey in 1 hour

Winnie can gather either 6 pints of Berries or 6 pints of Honey in 1 hour

• Opportunity cost of Tigger for gathering Berries is 0.33 pint of honey in 1 hour.
• Opportunity cost of Tigger for gathering Honey is 3 pint of berry in 1 hour.
• Opportunity cost of Wnnie for gathering Berries is 1 pint of honey in 1 hour.
• Opportunity cost of Winnie for gathering Honey is 1 pint of berry in 1 hour.

Person should gather that good which can be gathered in lesser opportunity cost. As Tigger have lower opportunity cost in gathering Berry, Tigger should gather berries. On the other hand, Winnie have lower opportunity cost in gathering honey, so Winnie should gather honey.