In a month, Carlos can produce a maximum of either 50 bushels of pears or 25 bushels of apples, or any linear combination in between.
Similarly, Debora can produce a maximum of either 40 bushels of pears or 10 bushels of apples, or any linear combination in between.
What is the opportunity cost for Carlos to produce one more bushel of apples in terms of pears? One bushel of apples equals bushels of pears.
What is the opportunity cost for Debora to produce one more bushel of apples in terms of pears? One bushel of apples equals bushels of pears.
What would Debora and Carlos agree to as acceptable terms of trade?
bushels of pears per bushel of apples.
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