Economics Semester Exam

Question

2 of 312 of 31 Items
Question
A business produces picnic tables and benches. The business currently produces 20 tables and 10 benches per week. An increase in demand for benches has the business considering a change to 15 tables and 15 benches per week. What is the trade-off the business must make?(1 point)
Responses

the difference between the profit of 10 benches and the profit of 15 benches
the difference between the profit of 10 benches and the profit of 15 benches

the difference between the profit of 20 tables and the profit of 15 tables
the difference between the profit of 20 tables and the profit of 15 tables

the choice between the cost of the new production schedule and the cost of the old production schedule
the choice between the cost of the new production schedule and the cost of the old production schedule

the choice between the net profit of the new production schedule and the net profit of the old production schedule

Answer 1

The appropriate response to the question regarding the trade-off the business must make when changing its production from 20 tables and 10 benches to 15 tables and 15 benches is:

the difference between the profit of 20 tables and the profit of 15 tables.

This choice highlights the trade-off in terms of the opportunity cost of producing fewer tables in order to produce more benches, which reflects the change in profit as a result of this production shift.