Opportunity cost for Mary for 1 tray of biscuits = 1 pound of tea

Opportunity cost for Zoe for 1 tray of biscuits = 3/2=1.5 pounds of tea

Opportunity cost for Bill for 1 tray of biscuits = 1/3 = 0.33 pounds of tea

If someone wanted to trade with them at the rate of 2 trays of biscuits for 1 pound of tea and is happy to buy or sell each of the goods, should Mary, Zoe or Bill accept a deal? If so, how much of each good should they produce to maximize their consumption possibilities? Who should produce what? How would this look on a graph?

Answer rating: 100% (QA)

To determine if Mary Zoe or Bill should accept the deal and how much of each good they should produc... View the full answer