Scenario: There Are Two Workers in a Factory That Produces

question 82

Multiple Choice

Scenario: There are two workers in a factory that produces two goods, Good X and Good Y. Worker 1 adds a value of $200 per hour in the production of Good X and a value of $100 per hour in the production of Good Y. Worker 2 adds a value of $125 per hour in the production of Good X and a value of $87.50 per hour in the production of Good Y.
-Refer to the scenario above.Identify the correct statement.

• A) Worker 1 is less productive than Worker 2 at producing Good Y.
• B) Worker 1 is more productive than Worker 2 at producing Good X.
• C) Worker 2 can produce Good X at a lower opportunity cost than Worker 1.
• D) Worker 2 has an absolute advantage in the production of Good Y.

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Definitions:

Household Saving

The portion of a household's disposable income that is not spent on current consumption but is set aside for future use.

Consumption

The use of goods and services by households, constituting one of the primary components of GDP and an important indicator of economic health.

Aggregate Demand

The overall need for goods and services within an economic system at multiple pricing levels, over a certain duration.

Fed Buys Bonds

An action by the Federal Reserve to purchase government securities from the market to increase the money supply and lower interest rates.