Answer to Question #138331 in Microeconomics for Ava Galante

Question

Alexi and Tony own a food truck that serves only two items, street tacos and Cuban sandwiches. As shown in the table, Alexi can make 80 street tacos per hour but only 20 Cuban sandwiches. Tony is a bit faster and can make 100 street tacos or 30 Cuban sandwiches in an hour. Alexi and Tony can sell all the street tacos and Cuban sandwiches that they are able to produce.
a. For Alexi and for Tony, what is the opportunity cost of a street taco? Who has a comparative advantage in the pro- duction of street tacos? Explain your answer.

Answer 1

Opportunity cost of a street taco for Alexi is;

$\frac{20}{80} = \frac{1}{4}$

Opportunity cost of a street taco for Toni is;

$\frac{30}{100} = \frac{3}{10}$

Alexi

Because, he produces less in an hour than Toni