Use the following scenario to answer the following questions:
Esther and Ebenezer produce hamburgers and hot dogs.Esther can produce six hamburgers per hour or four hot dogs per hour.Ebenezer can produce three hamburgers per hour or one hot dog per hour.
-Based on the scenario,Esther's opportunity cost of one hot dog is ________ hamburgers.

Question

Quizplus · Accepted Answer

To find Esther's opportunity cost of one hot dog, we need to determine how many hamburgers she would have to give up to produce one more hot dog. Since Esther can produce six hamburgers per hour, she would have to give up 4/6 or 2/3 of a hamburger to produce one more hot dog. Simplifying, 2/3 of a hamburger is equal to one and a half hamburgers.

Based on comparative advantage, Esther should specialize in producing hamburgers since she has a lower opportunity cost of producing them (2/3 of a hot dog) compared to Ebenezer (3 hamburgers). Ebenezer should specialize in producing hot dogs since he has a lower opportunity cost of producing them (1/3 of a hamburger) compared to Esther (1.5 hamburgers). Together, they can trade and benefit from each other's comparative advantage.

Use the Following Scenario to Answer the Following Questions