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:

Bureaucratic Control

The use of rules, procedures, and formal structures to manage an organization and control its activities.

Profitability

The extent to which a company or action generates income or economic benefit.

Market Share

The portion of a market controlled by a particular company, measured by the proportion of sales that company enjoys compared to total industry sales.

Horizontal Coordination

An organizational strategy that involves the collaboration and communication across different departments or units to achieve common goals.