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.
I am facing difficulty in this question. Help me in find out correct answer of this economy based question. From heterodox perspective, why do business enterprises choose administered prices as opposed to highly flexible prices?
The advocates of laissez-faire policies favor: (i) Govt. control of economy. (ii) Public ownership of all the resources. (iii) Income to be distributed according to requirement. (iv) Surpluses in the balance of trade. (v) Minimal govt. intervention in economy.
Describe redistributive effects of inflation?
Question: Describe the present economic crisis situation in Europe. Why has it been so difficult for the Europeans to find a solution to this problem? Comment on what implications the crisis may have for the rest of the world i
Illustrate other than price many factors determine the outcome?
Can someone help me in finding out the right answer from the given options. In resource markets in a simple circular flow model, house-holds exchange their _________ for _________. (1) Resources | income. (2) Goods | profits. (3) Labor | goods. (4) Devotion | enlighte
Give a brief introduction of the term Operating Leverage?
Describe GDP gap and Okun’s Law?
Evaluate and explain the statements: “Market is its own guardian implies that there really is an invisible hand or taskmaster that watches over the decision makers in the marketplace”
For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gi
18,76,764
1925770 Asked
3,689
Active Tutors
1452952
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!