Mike and Sandy Are Two Woodworkers Who Both Make Tables

question 7

Multiple Choice

Mike and Sandy are two woodworkers who both make tables and chairs.In one month,Mike can make 4 tables or 20 chairs,where Sandy can make 6 tables or 18 chairs.Given this,we know that the opportunity cost of 1 table is

• A)1/5 chair for Mike and 1/3 chair for Sandy.
• B)5 chairs for Mike and 3 chairs for Sandy.
• C)1/3 chair for Mike and 1/5 chair for Sandy.
• D)3 chairs for Mike and 5 chairs for Sandy.

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Definitions:

Price Controls

Government-imposed limits on the prices charged for goods and services in a market, aiming to maintain affordability and prevent inflation.

Consumer Surplus

The difference between the maximum price consumers are willing to pay for a good or service and the actual price they pay, representing the benefit obtained by consumers in the transaction.

Market Price

The current price at which an asset or service can be bought or sold; determined by supply and demand.

Sugar Quotas

Government-imposed limits on the quantity of sugar that can be imported or produced domestically, often used to protect domestic production and control prices.