Rina and Yvette 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. Rina takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Yvette takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza.
Rina's opportunity cost of brewing a gallon of root beer is 2 pizzas, and Yvette's opportunity cost of brewing a gallon of root beer is 1.5 pizzas.
Rina has an absolute advantage in brewing root beer, and Yvette has a comparative advantage in making pizza.
If Rina and Yvette trade foods with each other, Rina will trade away pizza in exchange for root beer.
The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is 1 gallon of root beer, and the lowest price that makes both roommates better off is 0.67 gallons of root beer per pizza.