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George and Martha both make meatloaf and bake bread. It takes George three hours to bake six loaves of bread and two hours to make three meatloaves. It takes Martha three hours to bake eight loaves of bread and two hours to make three meatloaves. Currently George and Martha do not trade with one another. For this problem assume that George and Martha have linear production possibility frontiers and that they do not trade with anyone else.
a. Suppose George and Martha each have 60 hours this week that they can devote to bread baking and meatloaf cooking. Construct graphs depicting the production possibility frontiers for George and Martha. In your graphs make sure you label the x-axis and y-axis clearly. In your graphs, measure bread on the vertical axis and meatloaf on the horizontal axis.
b. What is George's opportunity cost of producing one loaf of bread?
c. What is George's opportunity cost of producing one meatloaf?
d. What is Martha's opportunity cost of producing one loaf of bread?
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