What is your opportunity cost of making a cake what is


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.

  1. What is your opportunity cost of making a cake? What is Kelly's opportunity cost of making a cake?
  2. 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?
  3. Who has the comparative advantage in making cakes? Why?
  4. If you and your sister Kelly trade foods with each other, who will trade away cakes in exchange for cider? Why?

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