Hubert and Kate run a catering business in which they have two major tasks: getting new cllenits and preparing food for events and parties. It takes Hubert 15 hours to prepare the food for an event and 3 hours of effort to get each new client. For Kate, it takes 10 hours to prepare food for an event and 5 hours to get a new client. In this scenario, has an absolute advantage In food preparation, and has a comparative advantage in food preparation. Suppose that initially, Hubert and Kate are splitting both tasks for a large number of events. Then they decide to start shifting some work according to the principle of comparative advantege. In particuler, 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 persan 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

Hubert and Kate run a catering business in which they have two major tasks: getting new cllenits and preparing food for events and parties. It takes Hubert 15 hours to prepare the food for an event and 3 hours of effort to get each new client. For Kate, it takes 10 hours to prepare food for an event and 5 hours to get a new client. In this scenario, has an absolute advantage In food preparation, and has a comparative advantage in food preparation. Suppose that initially, Hubert and Kate are splitting both tasks for a large number of events. Then they decide to start shifting some work according to the principle of comparative advantege. In particuler, 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 persan 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

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

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