Consider the following scenario to answer the questions that follow.
Two friends, Rachel and Joey, enjoy baking bread and making apple pies. Rachel takes two hours to bake one loaf of bread and one hour to make one pie. Joey takes four hours to bake one loaf of bread and four hours to make one pie.
-What is Joey's opportunity cost of baking a loaf of bread?
A) 4 pies
B) 2 pies
C) 1 pie
D) 1 loaf of bread
E) 1/2 loaf of bread

Question

Quizplus · Accepted Answer

Joey's opportunity cost of baking a loaf of bread is the number of pies he could have made in the same amount of time. Since he takes 4 hours to bake one loaf of bread, he could have made 4 pies in that time (since it takes him one hour to make each pie). Therefore, his opportunity cost of baking a loaf of bread is 4 pies.

Answer: Rachel should bake the bread and Joey should make the pies. 
 Rachel is more productive at baking bread since she only takes 2 hours to bake one loaf, while Joey takes 4 hours. However, Joey is more productive at making pies since he takes only 1 hour per pie, while Rachel takes 2 hours. Therefore, Rachel should focus on baking the bread and Joey should focus on making the pies, as they will be able to produce the most output this way.

Consider the Following Scenario to Answer the Questions That Follow