What is the answer to this opportunity cost?

I understand opportunity cost, but I don’t understand this question. Perhaps your professor can word it in an even more enigmatic way.

:( Awww

A .5
B Nina = Pizza, Mike Bread
c Nina should make all the Pizza, Mike make all the bread

This is a fairly ancient type of problem in economics. Obviously Nina is a better producer of both bread and pizza over Michael. In a given hour, she can produce 3 pizzas or 5 loaves of bread, whereas Michael can only produce 2 pizzas or 4 loaves of bread.

Obviously, Michael’s “opportunity cost” of each pizza is the chance to make 2 loaves of bread. (The “opportunity cost” in this case has to be stated in units of pizza, because some of his other “opportunity costs” are a chance to go to the beach, a chance to neck with Nina in back of the shop, etc.) But at least you know how much “chance to make loaves of bread” his time is worth.

“Comparative advantage” is obvious, no?

What should Nina and Michael do, then?

We only did this briefly but I believe this is oppurtunity cost. Please inform me if I’m wrong;

Oppurtunity cost is what you lose when you chose one object over the other. For example, if I gave you a Hershey bar or a Babe Ruth bar, and you chose Babe Ruth, your oppurtunity cost is the Hershey bar.

It can also work with other choices. For example, if you were given the choice to wake up early or hit the snooze button, you would also have oppurtunity costs. If you hit the snooze button, you would lose the time to get more done, but if you wake up, you would lose the extra sleep.

In this problem, however, the oppurtunity cost is harder to understand. You might need to check with your teacher. Maybe if Micheal makes the bread, the oppurtunity cost is not making pizza?

@DrBill Thank you

Opportunity cost is the benefit that could have been gotten if the other alternative(s) was (were) selected.

1) Michael’s opportunity cost of producing pizza means cost of pizzas that could have been produced more if Nina produced pizzas; so it is difference between number of pizzas produced by Nina & Michael; i.e. 30 – 20 = 10 pizzas per 10 hours. So, Michael’s opportunity cost of producing pizza is cost of 1 pizza per hour.

2) Nina is at advantage (for 10 pizzas & 10 loaves more than Michael per 10 hours).

Opportunity cost is the next best alternative foregone or given up when an economic decision is made.