In: Economics
Solution:
a) 1/5 of a lobster dinner to 1/3 of lobster dinner per pair red pants.
Explanation:
To find the range of possible prices for a pair of red pants is found by calculating the oppurtunity cost of lobster for both of them
Opportunity cost of 1 lobster dinner in Cape Cod = lobster
dinner/ red pants = 2/6 = 1/3 red pants
Opportunity cost of 1 lobster dinner in Nantucket = lobster dinner/
red pants = 1/5 red pants