Suppose that we have an economy with four workers. Paris H. can teach 3 yoga les

Question

Suppose that we have an economy with four workers. Paris H. can teach 3 yoga lessons or make 20 lattes a shift. Kim K, can teach 2 yoga lessons or make 8 lattes a shift. Mike S. can teach 1 yoga lesson or make 40 lattes a shift. And Pauly D. can teach 4 yoga lesson or make 4 lattes a shift. Suppose customers are willing to pay $4 each for lattes and $15 for yoga lesson.^ who should teach youg? Who should pull lattes? How many lattes will the economy make and how many yoga lesson and will it teach? Show the calculation of opportunity cost in your answer, and show how much revenue your solution brings. Assume that everyone will work a shift.

Explanation / Answer

Yoga Lessons Lattes Revenue from Yoga Revenue from Lattes Decision Opportunity Cost Revenue Paris 3 20 $45 $80 Make Lattes Nil $80 Kim 2 8 $30 $32 Teach Yoga $2 $30 Mike 1 40 $15 $160 Make Lattes Nil $160 Pauly 4 4 $60 $16 Teach Yoga Nil $60 Economy will make 6 60 Total $330

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