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Question
Consider the following scenario to answer the following questions: On a particular Saturday, Mark Zuckerberg and Bill Gates can either plant trees or spread mulch in their gardens. Their maximum output per day is listed in the following table, along with spaces where you can calculate the opportunity cost.
| Trees Planted | Opportunity Cost of 1 Tree | Amount of Mulch Spread (in cubic yards) | Opportunity Cost of Spreading 1 Cubic Yard of Mulch | |
| Zuckerberg | 20 | 30 | ||
| Gates | 15 | 30 |
At what terms of trade (relative price ratio) could they specialize and trade with one another so that both have more trees planted and mulch spread than they could accomplish on their own?
a. 12 trees planted per 12 cubic yards of mulch spread
b. 10 trees planted per 12 cubic yards of mulch spread
c. 9 trees planted per 12 cubic yards of mulch spread
d. 7 trees planted per 12 cubic yards of mulch spread
e. 5 trees planted per 12 cubic yards of mulch spread
Answer
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