Opportunity cost of gathering an extra bundle of firewood

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Suppose you and a friend are stranded on an island and must gather firewood and catch fish to survive. Through experience, you know that if each of you spends an entire day on either activity, the result is given in the following table:

Fish Firewood (bundles)

You 6 3

Your friend 8 2

a. What is the opportunity cost for you to gather an additional bundle of firewood?

b. What is your friend's opportunity cost of gathering an extra bundle of firewood?

c. Assuming that you and your friend specialize, what allocation of tasks maximizes total output for your one day of joint effort?

d. Suppose you both decide to work for two days according to the allocation in part (c). What is the total amount of output?

e. What would it have been had you chosen the reverse allocation of tasks?

Reference no: EM132790031

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