Suppose there are only two goods produced in an economy: phones and meals. Maria is adept at assembling electronics but has poor skills at preparing food. Mike is an accomplished chef but is not very skilled at assembling electronics.

Currently Mike and Maria each work independently, and they each produce both meals and phones. However, they are considering trading some of their respective output with each other, but only if that would allow each person to become more propserous.

Which statement is not true?

O Mike should produce more food and fewer phones, and Maria should produce more phones and fewer meals.

O Customers will gain if Mike and Maria decide to specialize in what they do best and trade their output.

O Mike and Maria would gain by using their time making only the one good that they are best at producing.

O Mike and Maria will both gain only if they trade the same number of phones for the same number of meals.

Question

Amelie

Business

31 March, 12:45

Suppose there are only two goods produced in an economy: phones and meals. Maria is adept at assembling electronics but has poor skills at preparing food. Mike is an accomplished chef but is not very skilled at assembling electronics.

Currently Mike and Maria each work independently, and they each produce both meals and phones. However, they are considering trading some of their respective output with each other, but only if that would allow each person to become more propserous.

Which statement is not true?

O Mike should produce more food and fewer phones, and Maria should produce more phones and fewer meals.

O Customers will gain if Mike and Maria decide to specialize in what they do best and trade their output.

O Mike and Maria would gain by using their time making only the one good that they are best at producing.

O Mike and Maria will both gain only if they trade the same number of phones for the same number of meals.

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Answers (1)

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Hana Gray · Answer 1

This statment is not true: O Mike and Maria will both gain only if they trade the same number of phones for the same number of meals.

Explanation:

Mike and Maria agreed to trade part of their results only if that option brought prosperity for both. So we must consider that exchanging the same number of phones and meals would not bring a balance of gain to both, since the financial value of a cell phone is much higher than that of a meal, so Maria would lose.

Compared to the other statements, all are true, because specialization in what they do best would provide added benefits to customers and producers, who would find ways to produce the good more effectively and streamlined processes.