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Suppose That Dwight and Jim Can Either Make Salads or Grill

Question 113

Multiple Choice

Suppose that Dwight and Jim can either make salads or grill steaks. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF) ?  Maximum  Number of  Salads  Opportunity  Cost of 1  Salad  Maximum  Number of  Steaks  Omportumity  Cost of 1  Steak  Dwight 91/3 steak 33 salads Jim121/2 steak 62 salads \begin{array} { | l | l | l | l | l | } \hline & \begin{array} { l } \text { Maximum } \\\text { Number of } \\\text { Salads }\end{array} & \begin{array} { l } \text { Opportunity } \\\text { Cost of 1 } \\\text { Salad }\end{array} & \begin{array} { l } \text { Maximum } \\\text { Number of } \\\text { Steaks }\end{array} & \begin{array} { l } \text { Omportumity } \\\text { Cost of 1 } \\\text { Steak }\end{array} \\\hline \text { Dwight } & 9 & 1 / 3 \text { steak } & 3 & 3 \text { salads } \\\hline \mathrm { Jim } & 12 & 1 / 2 \text { steak } & 6 & 2 \text { salads } \\\hline\end{array}


A) 1 salad per 1 steak
B) 2 salads per 1 steak
C) 2.5 salads per 1 steak
D) 3 salads per 1 steak
E) 3.5 salads per 1 steak

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