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    Economics

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    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? Should these two planners be self-sufficient (each producing statements and answering phones) or specialize? Be sure to show your work.

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    Absolute and Comparative Advantage

    Introduction
    The financial planning business has two financial planners, Phil and Francis. Within an hour's time, Phil can develop one financial statement or can respond to 8 phone calls and Francis can develop 2 financial statements or can respond to 10 phone calls. For getting benefits from both the financial planners' capability to perform their jobs, the opportunity cost will be an effective measure. It will also assist in analyzing the absolute advantage and comparative advantage of both the financial planners.
    Absolute and Comparative Advantage
    In terms of economics, absolute advantage can be defined as the ability of a person ...

    Solution Summary

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