Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. $$\begin{array} { | l | c | c | }
\hline & \begin{array} { c }
\text { Calculators } \
\text { Per Hour }
\end{array} & \begin{array} { c }
\text { Computers } \
\text { Per Hour }
\end{array} \
\hline \text { Smith } & 100 & 10 \
\hline \text { Jones } & 120 & 6 \
\hline
\end{array}$$ 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. $$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Calculators } \
\text { Per Hour }
\end{array} & \begin{array} { c } 
\text { Computers } \
\text { Per Hour }
\end{array} \
\hline \text { Smith } & 100 & 10 \
\hline \text { Jones } & 120 & 6 \
\hline
\end{array}$$ 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

Smith will split his time between computers and calculators, and Jones will produce only calculators.This is because Smith has a comparative advantage in producing computers, and Jones has a comparative advantage in producing calculators. Therefore, it is more efficient for Smith to specialize in producing computers and for Jones to specialize in producing calculators.

Smith and Jones Comprise a Two-Person Economy If Smith and Jones Are Dividing Their Time Efficiently and of Production