Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below.

-By coordinating their production decisions,the maximum number of computers Smith and Jones can produce is
A) 120.
B) 100.
C) 16.
D) 10.
E) 6.

Question

Smith and Jones comprise a two-person economy.Their hourly rates of production are shown below.
 
-By coordinating their production decisions,the maximum number of computers Smith and Jones can produce is
A) 120. 
B) 100. 
C) 16. 
D) 10. 
E) 6.

Quizplus · Accepted Answer

To find the maximum number of computers Smith and Jones can produce, we need to compare their hourly production rates and see which combination yields the highest value.

It is clear that Jones has a higher hourly production rate for both components of the computer, so the most efficient use of their time would be for Smith to only focus on producing mice while Jones produces both mice and CPUs.

In one hour, Jones can produce 2 CPUs and 2 mice, while Smith can produce 1 mouse. Therefore, in one hour they can produce 2 CPUs and 3 mice, which yields a total of 16 computers (since each computer requires 1 CPU and 1 mouse).

Thus, the best choice is C) 16.

Smith and Jones Comprise a Two-Person Economy