Kate Midtown and her son Sean have formed a two-person law firm to handle wills (which...

 

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Kate Midtown and her son Sean have formed a two-person law firm to handle wills (which you can call W for short) and divorces (call them D). The senior Ms. Midtown can typically complete 3 wills in a day, or 2 divorces. Molly can typically complete 2 wills per day, or 1 divorce. They each work 4 days per week. a. What is the opportunity cost of completing a will for each? b. Graph (separately) each of their individual production possibilities frontiers for a typical five- day week, putting wills (W) on the horizontal axis. c. Assume they both spend 2 days per week on wills, and 3 days on divorces. Show these combinations with dots on your graphs above. If their fees are $150 for a will and $250 for a divorce, what is the combined revenue per week for their law firm? d. Who has the absolute advantage in each service? Who has the comparative advantage in each? e. Sean now rediscovers his old economics textbook from college and decides to suggest a more efficient method of allocating work to his mother. What should he suggest, and by how much could he increase their weekly revenue? Kate Midtown and her son Sean have formed a two-person law firm to handle wills (which you can call W for short) and divorces (call them D). The senior Ms. Midtown can typically complete 3 wills in a day, or 2 divorces. Molly can typically complete 2 wills per day, or 1 divorce. They each work 4 days per week. a. What is the opportunity cost of completing a will for each? b. Graph (separately) each of their individual production possibilities frontiers for a typical five- day week, putting wills (W) on the horizontal axis. c. Assume they both spend 2 days per week on wills, and 3 days on divorces. Show these combinations with dots on your graphs above. If their fees are $150 for a will and $250 for a divorce, what is the combined revenue per week for their law firm? d. Who has the absolute advantage in each service? Who has the comparative advantage in each? e. Sean now rediscovers his old economics textbook from college and decides to suggest a more efficient method of allocating work to his mother. What should he suggest, and by how much could he increase their weekly revenue?

Answer rating: 100% (QA)

a The opportunity cost of completing a will for each person is the number of divorces they could have completed in the same time Opportunity cost of completing a will for Kate Midtown Kate can complet... View the full answer