Table 2-3

Table 2-3 shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2-3.What is Haley's opportunity cost of making a bracelet?
A) 3/4 of a bracelet
B) 3 bracelets
C) 1 1/3 necklaces
D) 2 necklaces

Question

Table 2-3
  
Table 2-3 shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2-3.What is Haley's opportunity cost of making a bracelet?
A) 3/4 of a bracelet 
B) 3 bracelets 
C) 1 1/3 necklaces 
D) 2 necklaces

Quizplus · Accepted Answer

Haley can make 3 bracelets or 4/3 necklaces in one week. Therefore, her opportunity cost of making a bracelet is 4/3 - 1 = 1 1/3 necklaces.

The best choice(s) depends on the specific circumstances and goals of the jewelers. If they want to maximize their total output, they should specialize in the item that they can produce more efficiently (i.e. has a lower opportunity cost). For example, if Serena can make 2 necklaces or 5 bracelets in one week, she has a lower opportunity cost of making necklaces (2/5) than bracelets (5/2). Therefore, Serena should specialize in making necklaces and Haley should specialize in making bracelets to maximize their total output. However, if they have different preferences, sales demand, or production constraints, the best choice(s) may differ.

Table 2-3 Table 2-3 Shows the Output Per Week of Two Jewelers