Sally and Amanda live in USA. They own a small business in which they make sandwiches and juice and sell them to people in the town. As shown in

the table below, Sally can make 15 sandwiches per hour but only 3 cans of

juice. Amanda is a bit slower and can make only 12 sandwiches or 2 cans of

juice in an hour.

Output per Hour

Sandwich juice

Sally 15 3

Amanda 12 2

a) For Sally and for Amanda, what is the opportunity cost of cans of

juice? Who has a comparative advantage in the production of can of

juice? Explain your answer.

b) Who has a comparative advantage in the production of sandwiches?

Explain your answer.

c) Assume that Sally works 20 hours per week in the business.

Assuming Sally is in business on her own, graph the possible

combinations of juice and sandwiches that she could produce in a

week. Do the same for Amanda.

d) If Sally devoted half of her time (10 out of 20 hours) to sandwiches

and half of the time to juice, how many of each would she produce

in a week? If Amanda did the same, how many of each would she

produce? How many sandwich and cans of juice would be produced

in total?

e) Suppose that Amanda spent all 20 hours of her time on sandwiches

and Sally spent 17 hours on juice and 3 hours on sandwiches.

How many of each item would be produced in total?

f) Suppose that Sally and Amanda can sell all their sandwiches for $1

each and all their juice for $5.50 each. If each of them worked 20

hours per week, how should they split their time between

sandwiches and can of juice? What is their maximum joint revenue?​