Megan Larry neither person 1 Comparative and absolute advantage Larry and Megan run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. It takes Larry 16 hours to prepare the food for an event and 4 hours of effort to get each new client. For Megan, it takes 10 hours to prepare food for an event and S hours to get a new client. In this scenario, has an absolute advantage in food preparation, and v has a comparative advantage in food preparation. Suppose that initially, Larry and Megan are splitting both tasks for a large number of events. Then they decide to start shifting some work according to the principle of comparative advantage. In particular, the person with the comparative advantage in food preparation will take over preparing food for one more event by taking the necessary time away from getting more clients, and the other person will use the freed-up time from not preparing food for one event to get more clients. As a result, the total number of events for which food is prepared will remain unchanged, but the number of new clients will increase by

Megan Larry neither person 1 Comparative and absolute advantage Larry and Megan run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. It takes Larry 16 hours to prepare the food for an event and 4 hours of effort to get each new client. For Megan, it takes 10 hours to prepare food for an event and S hours to get a new client. In this scenario, has an absolute advantage in food preparation, and v has a comparative advantage in food preparation. Suppose that initially, Larry and Megan are splitting both tasks for a large number of events. Then they decide to start shifting some work according to the principle of comparative advantage. In particular, the person with the comparative advantage in food preparation will take over preparing food for one more event by taking the necessary time away from getting more clients, and the other person will use the freed-up time from not preparing food for one event to get more clients. As a result, the total number of events for which food is prepared will remain unchanged, but the number of new clients will increase by

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Description: Please answer only if you are sure about the correct answers:the MeganLarryneither person1 Comparative and absolute advantageLarry and Megan run a catering business in which they have two major tasks: getting new clients and preparing food for events

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 5PA

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