Question

Kay and Dom run a coffee house together. In order to maximise output, they have decided to specialise with Kay taking customer orders, and Dom making coffees. In one working day, Kay can take 19 orders per hour and Dom can make a total of 84 coffees. Assume one working day is 6 hours. Select the item from the list provided to make the following statements true. - 1. Marginal benefit By specialising, Kay and Dom have their opportunity cost. More efficient - 3. Opportunity cost By Kay taking customer orders and Dom making coffees, they have maximised their output using the principal of 4. Coffees per hour If the allocation of tasks was reversed with Dom taking orders and Kay making coffee, one would expect output to be 5. Comparative advantage Rational ó ñ Incrementally more efficient o Absolute advantage 9. An economic choice 10. Marginally more efficient 11. Less efficient 12. Minimised

Answer 1

minimized the opportunity cost
opportunity cost is associated with the things foregone. Output is maximized if the combined opportunity cost is minimum

comparative advantage
it suggests the principal of one entity carrying out an activity more efficiently than the other

less efficient
as this is the maximum output