Watch the video to have a better understanding of Absolute Advantage.
2. Complete the assignment attached.
https://www.youtube.com/watch?v=Vvfzaq72wd0
We use the concepts of absolute and comparative advantage to explain why countries import some products and export others. We can also use them to explain how work can be divided between two people. Two consultantsâJohn and Jenniferâhave a client who needs a company report written and a PowerPoint presentation prepared within the next two weeks. Both John and Jennifer have experience writing reports and preparing presentations, but neither has the time to do both jobs. From past experience, they know how much time each of them needs to complete each type of project:
Consultant
Write a Report
Prepare a Presentation
John
80 hours
40 hours
Jennifer
150 hours
60 hours
Using the information contained in the grid above, answer each of the following questions:
Does either John or Jennifer have an absolute advantage in (1) writing reports and/or (2) preparing presentations?
Does either have a comparative advantage? [Note: To handle this question, first determine how many total hours would it take to serve the client if John writes the report and Jennifer prepares the presentation. Then determine how many total hours would be required if, instead, Jennifer writes the report and John prepares the presentation.]
Based on your analysis, how would you recommend that John and Jennifer divide the work?
Given your answer to the previous question, would you say that John has a comparative advantage in writing reports, in making presentations, or in both? What should John specialize in?
Does Jennifer have a comparative advantage in either task? What should she specialize in?
Watch the video to have a better understanding of Absolute Advantage.
2. Complete the assignment attached.
https://www.youtube.com/watch?v=Vvfzaq72wd0
We use the concepts of absolute and comparative advantage to explain why countries import some products and export others. We can also use them to explain how work can be divided between two people. Two consultantsâJohn and Jenniferâhave a client who needs a company report written and a PowerPoint presentation prepared within the next two weeks. Both John and Jennifer have experience writing reports and preparing presentations, but neither has the time to do both jobs. From past experience, they know how much time each of them needs to complete each type of project:
| Consultant | Write a Report | Prepare a Presentation |
| John | 80 hours | 40 hours |
| Jennifer | 150 hours | 60 hours |
Using the information contained in the grid above, answer each of the following questions:
Does either John or Jennifer have an absolute advantage in (1) writing reports and/or (2) preparing presentations?
Does either have a comparative advantage? [Note: To handle this question, first determine how many total hours would it take to serve the client if John writes the report and Jennifer prepares the presentation. Then determine how many total hours would be required if, instead, Jennifer writes the report and John prepares the presentation.]
Based on your analysis, how would you recommend that John and Jennifer divide the work?
Given your answer to the previous question, would you say that John has a comparative advantage in writing reports, in making presentations, or in both? What should John specialize in?
Does Jennifer have a comparative advantage in either task? What should she specialize in?
