Suppose that we have an economy with four workers. Paris H. can teach 3 yoga lessons...

Suppose that we have an economy with four workers. Paris H. can teach 3 yoga lessons or make 20 lattes a shift. Kim K. can teach 2 yoga lessons or make 8 lattes a shift. Mike S. can teach 1 yoga lesson or make 40 lattes a shift. And Pauly D. can teach 4 yoga lessons or make 4 lattes a shift. Suppose customers are willing to pay $4 each for lattes and $15 for yoga lessons. Who should teach yoga? Who should pull lattes? How many lattes will the economy make and how many yoga lessons will it teach? Show the calculation of opportunity cost in your answer, and show how much revenue your solution brings. Assume that everyone will work a shift.

Expert Solution

Every worker will choose the Option which will fetch him a greater Total revenue and With a lower opportunity cost of sacrificing the other option not chosen.

Rahul Sunny answered 1 year ago

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