Al and Bill Are the Only Workers in a Small

question 7

Multiple Choice

Al and Bill are the only workers in a small factory that makes geegaws and doodads.Al can make 7 geegaws per hour or 21 doodads per hour.Bill can make 4 geegaws per hour or 8 doodads per hour.Assuming that neither of them finds one task more odious than the other,

• A)Al has a comparative advantage in producing geegaws and Bill has a comparative advantage in producing doodads.
• B)Bill has a comparative advantage in producing both geegaws and doodads.
• C)Al has a comparative advantage in producing both geegaws and doodads.
• D)Bill has a comparative advantage in producing geegaws and Al has a comparative advantage in producing doodads.
• E)both have a comparative advantage in producing doodads.

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Definitions:

Motion Study

An examination and analysis of the movements involved in performing a task to improve work efficiency by reducing wasteful motions.

Subsystem

A smaller component of a larger system.

Open System

An organization or entity that interacts with its environment by exchanging information, resources, and influences with its context.

Closed System

An organizational model that operates independently of external influences, focusing inwardly for resources and information.