Author Question: The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two ... (Read 27728 times)

tth · **on:** Jun 29, 2018

The kitchen manager at an Italian restaurant is deciding what assignments he should give to his two cooks, John and David. John can make 25 pizzas or 40 servings of pasta per hour and David can make 20 pizzas or 30 servings of pasta.

Which of the following should be the manager's choice? A) Fire David because he is not as productive as John. John will do both jobs.
B) John will make pizza because he has comparative advantage in making pizza.
C) David will make pizza because he has comparative advantage in making pizza.
D) John and David both will spend half their time making pizza and half their time making pasta because each has a comparative advantage in making pizza.

Question 2

When consumers' incomes increased 6 percent, the quantity of wine bought increased 12 percent. This result means

A) wine is a luxury.
B) the demand for wine is income inelastic.
C) wine is a necessity.
D) wine is an inferior good.