Purchase Solution

Absolute or Comparative Advantage

Not what you're looking for?

Ask Custom Question

As a manager of a financial planning business you have two financial planners, Phil and Francis. In an hour, Phil can produce either one financial statement or answer 8 phone calls, while Francis can either produce 2 financial statements or answer 10 phone calls. Does either person have an absolute advantage in producing both products?

Purchase this Solution
Solution Summary

Absolute or Comparative Advantage are assessed.

Solution Preview

Absolute advantage is a situation where an entity can produce a good or a service using less resources than some other entity.

Comparative advantage is a situation where an entity can produce a good or a service at a lower opportunity cost than some other entity.

In this case Phil can produce ...

Purchase this Solution
Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • absolute advantage and comparative advantage

    Absolute advantage The term absolute advantage states that the ability of a country or form or to produce a good or service at a lower cost than the cost at which any other entity produces that good or service.

  • Absolute and Comparative Advantage Analysis

    Despite a country or economies having an absolute advantage in producing all goods, the other company or economies may have a comparative advantage.

  • Description of comparative advantage and absolute advantage

    346197 Description of comparative advantage and absolute advantage Explain the difference between comparative advantage and absolute advantage. Explain how economies benefit with specialization and trade.

  • comparative advantage

    380119 Absolute & Comparative Advantage 1. In a day of production, firms in Angola can produce 200 liters of oil or 100 kilograms of tungsten. Firms in Namibia can produce 160 liters of oil or 60 kilograms of tungsten.

  • Would you rather have a comparative or absolute advantage?

    468617 Comparative and Absolute Advantage If you were President of the US and you were making decisions on trading, would you rather have a comparative or absolute advantage in trading?

  • International trade, Absolute and Comparative Advantage

    562072 International trade, Absolute and Comparative Advantage Is First Mover Advantage a must? Is it an advantage to an MNC? Give an example of a successful first-mover or follower.

  • Differences - Comparative and absolute advantage

    126912 Comparative and Absolute Advantage What is the difference between comparative and absolute advantage? Why is the answer to this question important to managers?

  • Absolute and Comparative Advantage Differences

    582905 Absolute and Comparative Advantage Illustrate the principles of absolute and comparative advantage by using two nations in a hypothetical investment scenario. We consider two countries A and B in a hypothetical investment scenario.

  • Absolute and Comparative Advantage

    Answers are provided for each problem with the help of concepts in "Absolute and Comparative Advantage".

View More Related Solutions