Mike and Sandy Are Two Woodworkers Who Both Make Tables

question 142

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 chair is

• A) 1/5 table for Mike and 1/3 table for Sandy.
• B) 1/5 table for Mike and 3 tables for Sandy.
• C) 5 tables for Mike and 1/3 table for Sandy.
• D) 5 tables for Mike and 3 tables for Sandy.

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Definitions:

Fixed Asset Capacity

The maximum output or production level that can be achieved using the existing fixed assets under normal circumstances.

Growth Rate

The measure of an entity's increase in size, value, or quantity over a specific period, often expressed as a percentage.

Excess Capacity Scenario

A situation where a company can produce more goods or services than currently demanded because of available resources exceeding production requirements.

Sales Increase

The rise in the amount of goods or services sold by a company within a specific period.