Smith and Jones Comprise a Two-Person Economy

question 10

Multiple Choice

Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below.

-Suppose Smith and Jones begin at the point of producing 16 computers and 0 calculators in one hour.If they wish to produce 14 computers and 40 calculators in one hour,then Smith will spend __________ and Jones will spend __________.

• A) 1 hour on computers;40 minutes on computers and 20 minutes on calculators
• B) 1 hour on computers;20 minutes on computers and 40 minutes on calculators
• C) 30 minutes on each;30 minutes on each
• D) 45 minutes on computers and 15 on calculators;1 hour on calculators
• E) 1 hour on computers;50 minutes on computers and 10 minutes on calculators

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Definitions:

Plant Assets

Long-term tangible assets used in the production of goods and services, such as machinery, buildings, and equipment.

Accounting Period

The specific period of time covered by financial statements, typically a year or a quarter, for which all financial transactions are recorded and reported.

Straight-line

A method of depreciation that allocates an equal expense rate to each year of an asset’s useful life.

Accelerated Methods

Depreciation methods that allocate more depreciation expense to the earlier years of an asset's life.