In one hour, John can assemble either 20 telephones or 10 answering machines. It takes Sally two
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In one hour, John can assemble either 20 telephones or 10 answering machines. It takes Sally two hours to assemble either 20 telephones or 10 answering machines. Does either person have an absolute advantage in assembling either product? What about a competitive advantage? Explain (make sure you define absolute and competitive advantage and provide the opportunity costs for each person). Draw the combined production possibilities curve for the two people assuming that they work eight hours. Put answering machines on the horizontal axis.
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Managerial Economics and Organizational Architecture
ISBN: 978-0073523149
6th edition
Authors: James Brickley, Clifford W. Smith Jr., Jerold Zimmerman
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