Question

Your friend Sam has been asked to prepare appetizers for the university reception. She has an unlimited amount of ingredients and six hours in which to prepare them. Sam can make 400 mini-sandwiches or 200 servings of melon slices topped with smoked salmon and a dab of sauce per hour.

1. Sam's opportunity cost of making one mini-sandwich is   (Click to select)   2 melon appetizers   0.5 melon appetizer  .
   
2. Sam's opportunity cost of making one melon appetizer is   (Click to select)   2 mini-sandwiches   0.5 mini-sandwich  .
   
3. Suppose the reception has been postponed, so Sam has an extra four hours to prepare. The opportunity cost of making one mini-sandwich is now   (Click to select)   0.5 melon appetizer   2 melon appetizers  .
   
4. Suppose the reception has been postponed, so Sam has an extra four hours to prepare. The opportunity cost of making one melon appetizer is now   (Click to select)   2 mini-sandwiches   0.5 mini-sandwich  .
   
5. Suppose Sam’s friend Chris helps by preparing the melon slices, increasing Sam’s productivity to 400 mini-sandwiches or 400 melon appetizers per hour. The opportunity cost of making one mini-sandwich is now   (Click to select)   1 melon appetizer   2 melon appetizers  .
   
6. Suppose Sam’s friend Chris helps by preparing the melon slices, increasing Sam’s productivity to 400 mini-sandwiches or 400 melon appetizers per hour. The opportunity cost of making one melon appetizer is now

Answer 1

(a)

In one hour, Sam can make 400 mini-sandwiches or 200 melon appetizers.

Calculate the opportunity cost of one mini-sandwich -

Opportunity cost = Number of melon appetizers to be made in one hour/Number of mini-sandwiches to be made in one hour

Opportunity cost = 200/400

Opportunity cost = 0.5 melon appetizers

Thus,

Sam's opportunity cost of making one mini-sandwich is 0.5 melon appetizers.

(b)

In one hour, Sam can make 400 mini-sandwiches or 200 melon appetizers.

Calculate the opportunity cost of one melon appetizer -

Opportunity cost = Number of mini-sandwiches to be made in one hour/Number of melon appetizers to be made in one hour

Opportunity cost = 400/200

Opportunity cost = 2 mini-sandwiches

Thus,

Sam's opportunity cost of making one melon appetizer is 2 mini-sandwiches.

(c)

The event has been postponed and it has been provided that, now, Sam has 4 more hours to prepare the food.

However, the productivity of Sam has remain unchanged.

So,

The opportunity cost will remain same.

Sam's opportunity cost of making one mini-sandwich is 0.5 melon appetizers.

(d)

Sam's opportunity cost of making one melon appetizer is 2 mini-sandwiches.

(e)

Now, due to help from his friend Chris, the productivity of Sam has increased with respect to melon appetizers.

Sam can now make 400 mini-sandwiches or 400 melon appetizers per hour.

Calculate the opportunity cost of one mini-sandwich -

Opportunity cost = Number of melon appetizers to be made in one hour/Number of mini-sandwiches to be made in one hour

Opportunity cost = 400/400

Opportunity cost = 1 melon appetizers

Thus,

Sam's opportunity cost of making one mini-sandwich is now 1 melon appetizers.

(f)

Now, due to help from his friend Chris, the productivity of Sam has increased with respect to melon appetizers.

Sam can now make 400 mini-sandwiches or 400 melon appetizers per hour.

Calculate the opportunity cost of one melon appetizer -

Opportunity cost = Number of mini-sandwiches to be made in one hour/Number of melon appetizer to be made in one hour

Opportunity cost = 400/400

Opportunity cost = 1 mini-sandwich

Thus,

Sam's opportunity cost of making one melon appetizer is now 1 mini-sandwich.