Two friends, Rachel and Joey, enjoy baking bread and making apple pie. rachel takes 2 hours to bake a loaf of bread and 1 hour to make a pie. Joey takes 4 hours to bake a loaf of bread and 4 hours to make a pie. Please calculate to opportunity cost of baking bread for both rachel and joey. (teacher recommends using 4 hour blocks)
Who has the absolute advantage in baking bread?
Who has the comparative advantage?
Who should specialize in bread?
Who should specialize in pie?