Advantage in production of two products
Explain by giving example of an absolute advantage in production of two products?
Expert
A CPA can paint her house faster and better than a painter. She earns $50 per hour as accountant and can hire a painter for $15 per hour. The CPA can do the painting job in 30 hours; it takes the painter 40 hours. Should she hire the painter? On economic grounds, the opportunity cost is greater for the accountant to paint her house. She is better off to specialize in accounting rather than sacrifice 30 x $50, or $1500, to paint her house, when she can hire the painter for 40 x $15, or $600. The accountant will gain, and the painter will also gain because he is very inefficient in accounting. It may take him 10 hours to prepare his tax return which would mean 10 x $15, hours or $150, in opportunity cost, whereas the accountant could probably complete the forms in 2 hours for a cost of $100. This example shows that even if a person (the accountant) has an absolute advantage in production of two products (painting and accounting), it is still advantageous to specialize and trade. The same is true for nations.
Explain the statement: “The other things equal assumption helps isolate key economic relationships.”?
Explain how Entrepreneurs are risk-takers?
The points on a production possibilities curve communicate to combinations of goods which: (1) Can’t be generated with no technological advances. (2) Utilize all resources fully and efficiently in the production. (3) Can be generated, however use economic capaci
Question: Conduct an analysis on the following topic and prepare an Executive Summary-style report with supporting exhibits (Insightful Graphs, tables etc. from quality expert analyst references used to write the r
Question: Ambrose consumes two goods, peanuts (x1 ) and a composite good (x2). He has a utility functionU = 4 √x1 + x2. This means his MU1 = 2/ √x1 an
Describe unanticipated inflation?
Writings on the historical process by Adam Smith of economic development do not comprise heavy reliance upon: (1) the development of property rights. (2) self interest. (3) divisions of labor in production processes. (4) innovations d
Computing the cost of college education like the cost of books, tuition and materials, room as well as board, and spending money: (i) overstates the economic cost of a college education. (ii) accurately measures the economic cost of a college educatio
What do you mean by inflation
What are the main sources of growth?
18,76,764
1926129 Asked
3,689
Active Tutors
1437156
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!