Alice and Bob both like making bread and jam. In one day Alice can make 10 loafs of bread OR

20 jars of jam. In one day Bob can make 6 loafs of bread OR 36 jars of jam.

3a) What is Alice's opportunity cost of making 1 loaf of bread? (Include a definition of opportunity cost)

3b) What is Bob's opportunity cost of making one loaf of bread?

3c) If they both split their time evenly between bread making and jam making, how many loafs of bread

and jars of jam would they each have?

3d) If Alice only made bread and Bob only made jam, how many loafs of bread and jars of jam would they

have between them?

3e) If Alice only makes jam and Bob only makes bread, how many loafs of bread and jars of jam would they

have between them?

3f) Assume Alice and Bob specialize in their comparative advantage good, and then agree to trade 3 loafs

of bread for 12 jars of jam. How many loafs of bread and jars of jam do they each have now?