Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. If Smith and Jones are dividing their time efficiently and producing fewer than 10 computers and more than 120 calculators per hour, then Smith will ______ and Jones will ______.

Question

Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below.  If Smith and Jones are dividing their time efficiently and producing fewer than 10 computers and more than 120 calculators per hour, then Smith will ______ and Jones will ______.

Quizplus · Accepted Answer

Jones has a comparative advantage in producing calculators so should only make those. Smith should make the remaining calculators and all of the computers.

Smith and Jones Comprise a Two-Person Economy