It takes 4 hours for you to brew a gallon of cider and 2 hours to make a cake. Your sister Kelly takes 6 hours to brew a gallon of cider and 4 hours to make a cake.
- What is your opportunity cost of making a cake? What is Kelly's opportunity cost of making a cake?
- How many cakes can you make in an hour? How many cakes can Kelly make in an hour? Who has the absolute advantage in making cakes? Why?
- Who has the comparative advantage in making cakes? Why?
- If you and your sister Kelly trade foods with each other, who will trade away cakes in exchange for cider? Why?