The Same Constrained Resource Is Used by Four Different Products

question 40

Multiple Choice

The same constrained resource is used by four different products at Rodrigez Corporation. Data concerning those products appear below: $\begin{array}{lrrr}&Z 100 & Z 200 & Z 300 & Z 400 \\\text { Unit selling price }&\$ 31.80 & \$ 29.60 & \$ 15.90 & \$ 35.80 \\\text { Unit variable cost }&\$ 15.90 & \$ 6.80 & \$ 3.00 & \$ 24.30 \\\text { Amount of the constrained resource required. }&0.44 & 0.34 & 0.28 & 0.53\end{array}$ The company does not have enough of the constrained resource to satisfy for demand of all four products. From the standpoint of the entire company, if it is a choice between sales of one unit of one product versus another, which product should the salespersons emphasize?

• A)Z300
• B)Z400
• C)Z200
• D)Z100

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Definitions:

Inefficient Outcomes

Situations where resources are not allocated optimally, resulting in potential losses in economic welfare.

Allocative Efficiency

A state of resource allocation where it is impossible to make any one individual better off without making someone else worse off, often achieved when marginal cost equals marginal benefit.

Government Budget

A financial statement presenting the government's projected revenue and spending for a specific fiscal period, outlining planned financial operations and priorities.

Allocative Efficiency

A state of the economy where resources are allocated in a way that maximizes the utility or satisfaction of consumers.