Question

Amy and Bill are fixing up their house by painting walls and installing electrical outlets.

In one hour, Amy can paint 8 walls, or install 6 outlets.

In one hour, Bill can paint 5 walls, or install 5 outlets

a. If Amy painted 8 walls in the first hour of work, and then switched to doing 6 outlets in the second hour of work, what was the opportunity cost of each of those outlets?

Instructions: Round your answers to two decimal places.

For the third hour, if she switches back to painting 8 walls, what was the opportunity cost of each of those walls?

b. If Bill painted 5 walls in the first hour of work, and then switched to doing 5 outlets in the second hour of work, what was the opportunity cost of each of those outlets?

Instructions: Answer in whole numbers.

For the third hour, if he switches back to painting 5 walls, what was the opportunity cost of each of those walls?

Answer 1

We have been given the information that in one hour, Amy can paint 8 walls, or install 6 outlets and in the same time Bill can paint 5 walls, or install 5 outlets

a. Now that Amy has painted 8 walls in the first hour of work, she also had an opportunity to paint 6 outlets which she rejected. Similarly, she then switched to doing 6 outlets in the second hour of work, so she was not painting the 8 walls. Hence her opportunity cost of each of those outlets is 8/6 or 1.33 walls.

For the third hour, if she switches back to painting 8 walls, the opportunity cost of each of those walls is 6/8 = 0.75 outlets.

b. If Bill painted 5 walls in the first hour of work, and then switched to doing 5 outlets in the second hour of work, the opportunity cost of each of those outlets is the cost of the lost opportunity to paint 5 walls and for 1 outlet, it is 1 wall.

For the third hour, if he switches back to painting 5 walls, the opportunity cost of each of those walls is 1 outlet