Suppose that paulie and vinny each can produce ice cream or t-shirts. The table shows the quantity of each good that paulie and
1 answer:
Paulie's opportunity cost of producing a cup of ice cream is 4 T-shirts while Vinny's opportunity cost (C) of producing a t-shirt is 0.53
<h3>How to calculate the opportunity cost</h3>The table entries are given as:
Ice Cream (cups) T-shirts (quantity)
Paulie 5.00 20.00
Vinny 8.00 15.00
Paulie's opportunity cost of producing a cup of ice cream is calculated by dividing the number of T-shirts by the cups of ice cream.
So, we have:
Similarly, Vinny's opportunity cost (C) of producing a t-shirt is calculated by dividing the cups of ice cream by the number of T-shirts
So, we have:
Hence, Vinny's opportunity cost (C) of producing a t-shirt is 0.53
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Now we know that the performer uses $51.6 of $120 to pay the costs involved in putting on each performance. The only thing left to find his profits is subtract $51.6 from $120:
We can conclude that the performer makes a profit of $68.4 when 8 people attend his performance.
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Now we know that the performer uses $51.6 of $120 to pay the costs involved in putting on each performance. The only thing left to find his profits is subtract $51.6 from $120:
We can conclude that the performer makes a profit of $68.4 when 8 people attend his performance.