Andy and Chris work together at a bakery, making lemonade and iced tea. Andy can make 35 cups of lemonade per hour, 25 cups of iced tea per hour, or a combination of both. Chris can make 16 cups of lemonade per hour, 20 cups of iced tea per hour, or a combination of both. Fill in the blanks for the statements below. If your answer is a number, put it as a decimal. For example, if your answer is 4/3, you should put 1.33. If your answer is a name, spell it exactly as above.
Andy’s opportunity cost of 1 cup of lemonade is ____ cups of iced tea.
Andy’s opportunity cost of 1 cup of iced tea is ____ cups of lemonade.
Chris’s opportunity cost of 1 cup of lemonade is ____ cups of iced tea.
Chris’s opportunity cost of 1 cup of iced tea is ____ cups of lemonade.
____ has the absolute advantage in making lemonade.
____ has the absolute advantage in making iced tea.
____has the comparative advantage in making lemonade.
____has the comparative advantage in making iced tea.
Suppose Andy and Chris are not specialized. Andy is making 21 cups of lemonade and 10 cups of iced tea per hour. Chris is making 12 cups of lemonade and 5 cups of iced tea per hour. If Andy and Chris fully specialize, they will all together make ____ more cups of lemonade per hour and ____ more cups of iced tea per hour.
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