Question

What is Rachael's opportunity cost for producing 1 belt and 1 neck tie?
What is Mike's opportunity cost for producing 1 belt and 1 neck tie?
Who has the comparative advantage in the production of each good?

Rachel's Production
Belts neckties
0 8
1 12
2 4
3 0
Mike's production
Belts Neckties
0 9
3 6
6 3
9 0

Answer 1

@whpalmer4 help when you can?

Answer 2

I've never taken an econ class, so it's possible that my understanding of the terminology is not correct. However, it looks to me as if you might possibly have copied Rachel's necktie production column incorrectly. Shouldn't it be 12 8 4 0 rather than 8 12 4 0?

Answer 3

Yeah, that is my mistake

Answer 4

Okay, so it looks to me like each belt Rachel produces keeps her from producing 4 neckties, and each belt Mike produces keeps him from producing 1 necktie.

Rachel can make 12 neckties if she does nothing else, vs. 9 for Mike. Rachel has the advantage in the necktie department.

Mike can make 9 belts if he does nothing else, and Rachel can only manage 3. Mike has the advantage in the belt department.

Answer 5

I understood the advantage part. The first question however, how did you get that answer?

Answer 6

You mean the part where Rachel producing 1 belt keeps her from producing 4 neckties?

Answer 7

Yes, that part

Answer 8

I'm just looking at the slope of the line:

Answer 9

OHH!
That makes sense. Thanks

Answer 10

Great, hope that was helpful, it's all I have :-)