Homework SourseMario has reached a crossroads in his life He is trying to d
Mario has reached a crossroads in his life. He is trying to decide whether to change careers. Currently, Mario makes pizzas, but he is considering entering a different line of work testing video games. Mario can either test 6 games or toss 12 pizzas in a day. Interestingly, Mario’s friend Luigi is in a similar predicament. Luigi can test 3 games or toss 2 pizzas during a day.
Mario’s opportunity cost of testing one game: ___________________________
(yes, you can test fractional games)
Luigi’s opportunity cost of testing one game: ___________________________
(yes, you can test fractional games)
Mario’s opportunity cost of tossing one pizza: ___________________________
(yes, you can have fractional pizzas)
Luigi’s opportunity cost of tossing one pizza: ___________________________
(yes, you can have fractional pizzas)
Who has an absolute advantage in testing games? ________________________
Who has the comparative advantage in testing games? _____________________
Who has the comparative advantage in making pizzas? _____________________
Solution
Mario’s opportunity cost of testing one game: 2 pizzas (12pizzas/ 6 games = 2pizzas/1 game)
(yes, you can test fractional games)
Luigi’s opportunity cost of testing one game: 0.66 pizza ( 2pizzas/ 3 games = 0.66 pizza / 1 game)
(yes, you can test fractional games)
Mario’s opportunity cost of tossing one pizza: 0.5 games ( 6games/ 12 pizzas = 0.5 games/ 1pizza)
(yes, you can have fractional pizzas)
Luigi’s opportunity cost of tossing one pizza: 1.5 games (3 games/ 2pizza = 1.5 games/ 1 pizza)
(yes, you can have fractional pizzas)
Who has an absolute advantage in testing games? mario he can test 6 games whereas luigi only 3
Who has the comparative advantage in testing games? luigi only 0.66 pizza is sacrificed by him whereas mario has to sacrifice 2 pizzas
Who has the comparative advantage in making pizzas? mario because he has to sacrifice only 0.5 games whereas luigi has to sacrifice 1.5 games
