Assume there are two workers at the St. Louis Smoothie Company, Joe and Wendy, a

Question

Assume there are two workers at the St. Louis Smoothie Company, Joe and Wendy, and two menu items- smoothies and sandwiches. Answer the following questions based on the table below.

A. Who has the absolute advantage in producing smoothies?

B. Who has the absolute advantage in producing sandwiches?

C. What is the opportunity cost of Joe to produce 1 sandwich?

D. What is the opportunity cost of Joe to produce 1 smoothie?

F. What is the opportunity cost of Wendy to produce 1 sandwich?

Explanation / Answer

A. Joe has the absolute advantage in producing smoothies.

B.Joe has the absolute advantage in producing sandwiches.

C. To produce 1 sandwich Joe must forgo 4 minutes. (12/3)

D. To produce 1 smoothie Joe must forgo 15 seconds(0.25 minutes). (3/12)

F. To produce 1 sandwich Wendy must forgo 1 minute. (1/1)

Hope this helps, best of luck.

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