Pat and kris are roommates. they spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. pat takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. kris takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. a. what is each roommate’s opportunity cost of making a pizza? who has the absolute advantage in making pizza? who has the comparative advantage in making pizza? b. if pat and kris trade foods with each other, who will trade away pizza in exchange for root beer? c. the price of pizza can be expressed in terms of gallons of root beer. what is the highest price at which pizza can be traded that would make both roommates better off? what is the lowest price? explain.

Suppose that fizzo and pop hop are the only two firms that sell orange soda. the following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: pop hopadvertise doesn’t advertisefizzo advertise 10, 10 18, 2doesn’t advertise 2, 18 11, 11for example, the upper right cell shows that if fizzo advertises and pop hop doesn't advertise, fizzo will make a profit of $18 million, and pop hop will make a profit of $2 million. assume this is a simultaneous game and that fizzo and pop hop are both profit-maximizing firms.if fizzo decides to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise.if fizzo decides not to advertise, it will earn a profit if pop hop advertises and a profit if pop hop does not advertise.if pop hop advertises, fizzo makes a higher profit if it chooses (not to advertise, to .if pop hop doesn't advertise, fizzo makes a higher profit if it chooses (not to advertise, to . suppose that both firms start off not advertising. if the firms act independently, what strategies will they end up choosing? fizzo will choose to advertise and pop hop will choose not to advertise.both firms will choose to advertise.fizzo will choose not to advertise and pop hop will choose to advertise.both firms will choose not to advertise.again, suppose that both firms start off not advertising. if the firms decide to collude, what strategies will they end up choosing? fizzo will choose not to advertise and pop hop will choose to advertise.both firms will choose not to advertise.fizzo will choose to advertise and pop hop will choose not to advertise.both firms will choose to advertise.