Question

lan and dan are both able to produce nuts and bolts. the table below shows the amount of nuts or bolts that they can produce per work day.

	nuts	bolts
dan	50	250

use at least 3 decimal points in your answers and all intermediate calculations.
given this information:

1. lans opportunity cost of nuts is
2. lans opportunity cost of bolts is
3. dans opportunity cost of nuts is
4. dans opp
5. if the two trade with each other in nuts and bolts then
6. and dan
7. an accept or nuts (price of nuts) for them would be bolts for 1 nut.

Explanation:

Step1: Calculate Lan's opportunity - cost of nuts

Opportunity cost of nuts = $\frac{\text{Quantity of bolts}}{\text{Quantity of nuts}}$. For Lan, opportunity cost of nuts = $\frac{250}{100}=2.5$.

Step2: Calculate Lan's opportunity - cost of bolts

Opportunity cost of bolts = $\frac{\text{Quantity of nuts}}{\text{Quantity of bolts}}$. For Lan, opportunity cost of bolts = $\frac{100}{250}=0.4$.

Step3: Calculate Dan's opportunity - cost of nuts

Opportunity cost of nuts = $\frac{\text{Quantity of bolts}}{\text{Quantity of nuts}}$. For Dan, opportunity cost of nuts = $\frac{250}{50}=5$.

Step4: Calculate Dan's opportunity - cost of bolts

Opportunity cost of bolts = $\frac{\text{Quantity of nuts}}{\text{Quantity of bolts}}$. For Dan, opportunity cost of bolts = $\frac{50}{250}=0.2$.

Step5: Determine the range of acceptable trading price

The acceptable trading price of nuts (in terms of bolts) should be between the two opportunity - costs of nuts. The opportunity cost of nuts for Lan is 2.5 and for Dan is 5. So an acceptable price for nuts (price of nuts in terms of bolts) for them to trade would be a value between 2.5 and 5. Among the given options, 3 is in this range.

Answer:

1. 2.5
2. 0.4
3. 5
4. 0.2
5. 3