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.© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/economics/economic-history-and-theory/absolute-advantage-7h06
...financial statements is much higher as compared to his absolute advantage in terms of handling phone calls. In other words, he can produce double the amount of Phil's capacity to produce financial statements whereas can handle only 25% more calls than Phil in an hour. Therefore, it is advisable that Francis should stick to producing financial statements as the disadvantage of using Phil for this task is greater as compared to handling phone calls.
Phil should handle phone ...