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Smith and Jones Comprise a Two-Person Economy

Question 59

Multiple Choice

Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below.   Suppose Smith and Jones begin by producing 100 calculators per hour; as Smith and Jones choose to efficiently produce fewer computers and more calculators, ______ should devote more time to calculators because his ______. A)  Smith; absolute advantage is larger B)  Jones; absolute advantage is smaller C)  Jones; opportunity costs are lower D)  Smith; opportunity costs are lower Suppose Smith and Jones begin by producing 100 calculators per hour; as Smith and Jones choose to efficiently produce fewer computers and more calculators, ______ should devote more time to calculators because his ______.


A) Smith; absolute advantage is larger
B) Jones; absolute advantage is smaller
C) Jones; opportunity costs are lower
D) Smith; opportunity costs are lower

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