Rachael and Mike both produce belts and neck ties in the Macro Islands. The table above shows some of the combinations of the two products that can be produced using the same resources.

Use the table above to answer the following questions:

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

Question

Rachael and Mike both produce belts and neck ties in the Macro Islands. The table above shows some of the combinations of the two products that can be produced using the same resources.

Use the table above to answer the following questions:

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

anonymous · Answer

Rachel                                                     MIke: 
belts        ties                                     belts                        ties
0                12                                      0                               9
1                  8                                      3                               6 
2                  4                                        6                             3 
3                 0                                         9                               0

anonymous · Answer

Well Rachel's opportunity cost for producing one belt is 8 ties.