Suppose That, on a Particular Saturday, Mark Zuckerberg and Bill

question 103

Multiple Choice

Suppose that, on a particular Saturday, Mark Zuckerberg and Bill Gates can either plant trees or spread mulch in their gardens. Their maximum output per day is listed in the following table, along with blanks where you can calculate the opportunity cost. At what terms of trade (relative price ratio) could they specialize and trade with one another so that both have more trees planted and mulch spread than they could accomplish on their own? $$\begin{array} { | l | l | l | l | l | } \hline & \begin{array} { l } \text { Trees } \\\text { Planted }\end{array} & \begin{array} { l } \text { Opportunity } \\\text { Cost of 1 } \\\text { Tree }\end{array} & \begin{array} { l } \text { Amount } \\\text { of Mulch } \\\text { spread (in } \\\text { cubic } \\\text { yards) }\end{array} & \begin{array} { l } \text { Opportunity } \\\text { Cost of } \\\text { Spreadling 1 } \\\text { Cubic Yard of } \\\text { Mulch }\end{array} \\\hline \text { Zuckerberg } & 20 & & 30 & \\\hline \text { Gates } & 15 & & 30 & \\\hline\end{array}$$

• A) 12 trees planted per 12 cubic yards of mulch spread
• B) 10 trees planted per 12 cubic yards of mulch spread
• C) 9 trees planted per 12 cubic yards of mulch spread
• D) 7 trees planted per 12 cubic yards of mulch spread
• E) 5 trees planted per 12 cubic yards of mulch spread

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Definitions:

Initial Offer

The first proposal or bid made during negotiations.

Government

The organized system of institutions, policies, and laws through which a community or country is ruled and administered.

Express Term

A provision in a contract that is clearly articulated and agreed upon by all parties, either orally or in writing.

Warranty

A guarantee provided by a seller that the product or service offered meets certain criteria and that any defects will be fixed or compensated.