John and Mary Work Eight Hours at a Bakery

question 279

Multiple Choice

John and Mary work eight hours at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario

• A)Mary has the absolute advantage in decorating wedding cakes.
• B)John has the absolute advantage in decorating wedding cakes.
• C)Mary has the comparative advantage in decorating wedding cakes.
• D)John has the comparative advantage in decorating ice-cream cakes.

---

Definitions:

Direct Labor-hour

A measure of the work time involved in producing goods, usually expressed in hours, directly tied to the labor cost of manufacturing.

Accounts Payable

Short-term liabilities representing amounts owed to suppliers or creditors for goods and services received that have not yet been paid for.

Raw Materials

The basic materials and substances that are used in the production of goods, often processed in various ways to create the final product.

Direct Labor Cost

The total expense of employing workers directly involved in manufacturing goods, including wages, benefits, and insurance.