Tom and Jerry have one day to work, but two tasks to focus on: building chairs and tables. If Tom spends all day building chairs, he will make 16 chairs. If he instead devotes his day to building tables, Tom will make 4 tables. If Jerry spends his day building chairs, he will make 14 chairs; if he spends the day building tables, he will make 7 tables. If Jerry decides to specialize in building tables, what are the limits to his terms of trade?
A) Jerry will accept no less than 7 chairs for each table.
B) Jerry will accept no less than 2 chairs for each table.
C) Jerry will accept no less than 7 tables for each chair.
D) Jerry will accept no less than 2 tables for each chair.

Question

Quizplus · Accepted Answer

Jerry's opportunity cost for making a table is 14 chairs (since he could have made 14 chairs in the time it takes him to make a table). Therefore, he would want at least 2 chairs in trade for each table to make the trade worthwhile, considering Tom can make 16 chairs in the time it takes him to make 4 tables, which simplifies to 4 chairs per table.

Tom and Jerry Have One Day to Work, but Two