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Question
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 | 9 | 1/3 steak | 3 | 3 salads |
| Hussein | 12 | 1/2 steak | 6 | 2 salads |
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
Answer
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