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) Beth should produce pizza because she has a higher opportunity cost of producing pizza than does Joe.
B) Beth should produce pizza because she has a lower 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) Joe should produce pizza because he has a lower opportunity cost of producing pizza than does Beth.

Question

Quizplus · Accepted Answer

Beth has a lower opportunity cost of producing pizza than Joe because she can produce 9 pizzas in the time it takes Joe to produce 5 pizzas or 10 sandwiches, meaning she can produce more pizzas per hour than Joe. Therefore, she should specialize in producing pizzas.

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