Suppose That Sheldon and Leonard Can Either Run Errands or Wash

question 12

Multiple Choice

Suppose that Sheldon and Leonard can either run errands or wash dishes. Their maximum output per hour is listed in the following table. Given the same quantity of resources, at what terms of trade (relative price ratio) could they specialize and trade so that both consume outside their own production possibilities frontier (PPF) ? $$\begin{array} { | l | l | l | l | l | } \hline & \begin{array} { l } \text { Errands } \\\text { Run }\end{array} & \begin{array} { l } \text { Opporturity } \\\text { Cost of 1 } \\\text { Errand }\end{array} & \begin{array} { l } \text { Dishes } \\\text { Washed }\end{array} & \begin{array} { l } \text { Opportumity } \\\text { Cost of 1 Dish } \\\text { Washed }\end{array} \\\hline \text { Sheldon } & 1 & 60 \text { dishes } & 60 & 1 / 60 \text { errand } \\\hline \text { Leonard } & 3 & 15 \text { dishes } & 45 & 1 / 15 \text { errand } \\\hline\end{array}$$

• A) 1 errand run per 75 dishes washed
• B) 1 errand run per 30 dishes washed
• C) 1 errand run per 12 dishes washed
• D) 1 errand run per 10 dishes washed
• E) 1 errand run per 6 dishes washed

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Definitions:

Preparing Deliveries

The process involved in getting goods ready for shipment to customers, including packaging, labeling, and coordinating logistics.

Time-Driven

Refers to actions or processes that are triggered or scheduled based on specific time conditions.

Activity-Based Costing

A costing method that assigns costs to products based on the activities required to produce each product, with the aim of providing more accurate product costing.

Customer Support

Services provided by a company to assist customers in making cost-effective and correct use of a product.