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Suppose That Leslie and Hussein Can Either Make Salads or Grill

Question 168

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Suppose that Leslie and Hussein can either make salads or grill steaks. 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) ?  Maximum  Number of Salads  Opportunity  Cost of 1 Salad  Maximum  Number of Steaks  Opportunity Cost  of 1 Steak  Leslie 91/3 steak 33 salads  Hussein 121/2 steak 62 salads \begin{array} { l l l l l } \hline & \begin{array} { l } \text { Maximum } \\\text { Number of Salads }\end{array} & \begin{array} { l } \text { Opportunity } \\\text { Cost of 1 Salad }\end{array} & \begin{array} { l } \text { Maximum } \\\text { Number of Steaks }\end{array} & \begin{array} { l } \text { Opportunity Cost } \\\text { of 1 Steak }\end{array} \\\hline \text { Leslie } & 9 & 1 / 3 \text { steak } & 3 & 3 \text { salads } \\\text { Hussein } & 12 & 1 / 2 \text { steak } & 6 & 2 \text { salads } \\\hline\end{array}


A) 1 salad per 1 steak
B) 2 salads per 1 steak
C) 2.5 salads per 1 steak
D) 3 salads per 1 steak
E) 3.5 salads per 1 steak

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