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.
Opportunity costs, which are the values of the: (i) monetary costs of goods and services. (ii) best alternatives sacrificed while choices are made. (iii) minimal budgets of families upon welfare. (iv) hidden charges passed upon to consumers. (v) exorb
Illustrate the advantage and disadvantage of Sole proprietorship?
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
After the Spanish found the new world, they promptly began to plunder this. They imported huge amount of gold and silver to Spain. It inflow of bullion caused a rapid increase in inflation, that would have grave consequences for Spain. It is quick inflation made this
Briefly state the pros and cons of Corporation?
Problem: Luke likes to consumer CDs (good1) and pizzas (good 2). His preference over both goods is given by the utility function U(x1; x2) = x21
Illustrate the 2nd function to promote and maintain competition?
In Wealth of Nations by Adam Smith, opined that the productivity of labor based primarily on: (w) workers’ education. (x) divisions of labor. (y) technologically advanced machines. (z) suitable wage rates. Q : Illustrate the supply curve and also Illustrate the supply curve and also determinants of supply?
Illustrate the supply curve and also determinants of supply?
What are the criteria of issuing stocks or bonds?
18,76,764
1955742 Asked
3,689
Active Tutors
1436635
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!