Tom and Jerry Have One Day to Work, but Two

question 112

Multiple Choice

Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. After looking at the production possibilities for both Tom and Jerry, what can we conclude?

• A) Tom has a comparative advantage at producing chairs.
• B) Jerry has a comparative advantage at producing chairs.
• C) Tom has a comparative advantage at producing tables.
• D) Neither Tom nor Jerry has a comparative advantage at producing either good.

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Definitions:

Marginal Productivity

The additional output that is produced by adding one more unit of a particular input while holding all other inputs constant.

Complements In Production

Goods that are produced together or their production levels are directly linked; an increase in the production of one leads to an increase in the production of the other.

Substitute Resources

Alternative inputs or resources that can be used in place of another in the production process.

MRP

Material Requirements Planning (MRP) is a production planning, scheduling, and inventory control system used to manage manufacturing processes.