Calculate the opportunity costs of activities

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Snoopy and Woodstock both need to have some letters typed and some carpets vacuumed. The following table describes how much each of them can accomplish in one hour if that hour is spent either typing or vacuuming: 

 

Letters   Typed in 1 Hour:

Rooms   vacuumed in 1 Hour:

Woodstock:  

3 letters

2 rooms

Snoopy:  

4 letters

6 rooms

1. Calculate the opportunity costs of both activities for both Woodstock and Snoopy in terms of what they give up for a unit of each task (i.e., calculate how many rooms each of them would give up by using their time to type a letter rather than use that time vacuuming and vice versa).

2. Explain how and why comparative advantage means for both Snoopy and Woodstock could be made better off by trading tasks, even though Snoopy is clearly better at both tasks in the sense that it takes him less time than it takes Woodstock to perform either task. 

Reference no: EM133133475

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