Question

Current St × Connect- M MIIE Res. × 뭉 Top Hat | i. Cengage × G Get Home | G E >< Course M: × Homeworkx Math 176 С О https://practice.flatworldknowledge.com/courses/726/assignments/1753/view/attempt FlatWorld ATTEMPT GRADES Full Screen Accessibility 22 of 25 Hello, Nathaniel Question 16 Question 17 Question 18 Question 19 Question 20 Question 21 Question 22 Question 23 Question 24 Question 25 It takes Fred 40 hours to construct a shed, and it takes him 10 hours to construct a shelf. it takes Sandy 32 hours to construct a shed, and it takes her 4 hours to construct a shelf. What is the maximum price that would be paid for 1 shelf? COURSES 8 sheds 0.125 sheds 4 sheds ALL ASSIGNMENTS HOME 参0.25 sheds DASHBOARD LOG OUT Next Read the related chapter CATALOG CONTACT & SUPPORT TERMS OF USE PRIVACY & IP POLICIES D FlatWorld 2019 3:25

Answer 1

Fred can construct 1 shed in 40 hours and 1 shelf in 10 hours.

So,

Opportunity cost of 1 shelf = 10/40 = 0.25 sheds

Sandy can construct 1 shed in 32 hours and 1 shelf in 4 hours.

So,

Opportunity cost of 1 shelf = 4/32 = 0.125 sheds

Sandy can produce shelf at lower opportunity cost.

So,

Sandy will specialize in production of shelf and would trade with Fred.

Since, opportunity cost of 1 shelf for Fred is 0.25 Shed, the maximum price that he would be willing to pay for shelf is 0.25 sheds.

Hence, the correct answer is the option (d) [0.25 sheds].