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Suppose That Lo and Manuel Can Either Run Errands or Wash

Question 134

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Suppose that Lo and Manuel can either run errands or wash dishes. Their maximum outputs per hour are listed in the following table. Given the same quantity of resources, at what terms of trade relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontiers PPFs) ?  Errands  Run  Opportunity Cost  of 1 Errand  Dishes  Washed  Opportunity Cost  of 1 Dish Washed  Lo 160 dishes 601/60 errand  Manuel 315 dishes 451/15 errand \begin{array} { l l l l l } \hline & \begin{array} { l } \text { Errands } \\\text { Run }\end{array} & \begin{array} { l } \text { Opportunity Cost } \\\text { of 1 Errand }\end{array} & \begin{array} { l } \text { Dishes } \\\text { Washed }\end{array} & \begin{array} { l } \text { Opportunity Cost } \\\text { of 1 Dish Washed }\end{array} \\\hline \text { Lo } & 1 & 60 \text { dishes } & 60 & 1 / 60 \text { errand } \\\text { Manuel } & 3 & 15 \text { dishes } & 45 & 1 / 15 \text { errand } \\\hline\end{array}


A) 1 errand run per 75 dishes washed
B) 1 errand run per 30 dishes washed
C) 1 errand run per 12 dishes washed
D) 1 errand run per 10 dishes washed
E) 1 errand run per 6 dishes washed

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