Jim Pam Dwight and Kelly are asked by their boss Michael to

Jim, Pam, Dwight and Kelly are asked by their boss Michael to make paper airplanes and paper hats
for the upcoming company party. The table shows the maximum number of airplanes or hats that each
employee can make during one hour. Workers can produce any linear combination of their extreme
values. The group decides to assign the tasks efficiently. Suppose Dwight is making both airplanes and
hats. Given that information, which one of the following statements is true?

10. Jim, Pam, Dwight and Kelly are asked by their boss Michael to make paper airplanes and paper hats for the upcoming company party. The table shows the maximum mumber of airplanes or hats that each employee can make during one hour. Workers can produce any linear combination of their extreme values. The group decides to assign the tasks efficiently. Suppose Dwight is making both airplanes and hats. Given that information, which one of the following statements is true? A. Jim is making only hats. B. Pam is making only planes. C. Jim, Pam and Kelly are also producing some of both. D. Kelly is not making hats. E. Everyone is making planes Planes Hats 13 \'4 Dwight 33 10 10 20 30 12 Fain Kelly

Solution

First of all we will Draw each person’s PPF and notice the following with respect to the marginal opportunity cost of hats in terms of planes: Pam’s = 6/5, Kelly’s=5/6, Dwight’s=11/10 and Jim’s=13/10. So if Dwight is making both, both, by now you have Pam and Jim doing only Planes, and Kelly doing only hats.

B. Pam is making only planes.