Suppose That Lo and Manuel Can Either Run Errands or Wash

question 134

Multiple Choice

Suppose that Lo and Manuel can either run errands or wash dishes. Their maximum outputs per hour are listed in the following table. Given the same quantity of resources, at what terms of trade relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontiers PPFs) ? $$\begin{array} { l l l l l } \hline & \begin{array} { l } \text { Errands } \\\text { Run }\end{array} & \begin{array} { l } \text { Opportunity Cost } \\\text { of 1 Errand }\end{array} & \begin{array} { l } \text { Dishes } \\\text { Washed }\end{array} & \begin{array} { l } \text { Opportunity Cost } \\\text { of 1 Dish Washed }\end{array} \\\hline \text { Lo } & 1 & 60 \text { dishes } & 60 & 1 / 60 \text { errand } \\\text { Manuel } & 3 & 15 \text { dishes } & 45 & 1 / 15 \text { errand } \\\hline\end{array}$$

• A) 1 errand run per 75 dishes washed
• B) 1 errand run per 30 dishes washed
• C) 1 errand run per 12 dishes washed
• D) 1 errand run per 10 dishes washed
• E) 1 errand run per 6 dishes washed

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Definitions:

Cost-Saving

Strategies or actions taken to reduce expenses and improve efficiency, often to increase profitability.

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A senior lawyer who oversees the work of junior lawyers, ensuring legal work meets professional standards.

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A specialist in a particular field, called to testify in court cases because of their expertise, to provide a professional opinion on specific matters.