Suppose Joe can prepare 10 sandwiches or 5 pizzas in an hour and Beth can produce 12 sandwiches or 9 pizzas. Which of the following is true?
A) Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth.
B) Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe.
C) Joe should produce pizza because he has a higher opportunity cost of producing pizza than does Beth.
D) Beth should produce pizza because she has a lower opportunity cost of producing pizza than does Joe.

Question

Quizplus · Accepted Answer

Beth should produce pizza because her opportunity cost of producing one pizza is 1.33 sandwiches (12/9), which is lower than Joe's opportunity cost of 2 sandwiches (10/5).

Suppose Joe Can Prepare 10 Sandwiches or 5 Pizzas in an Hour