Takenya Pringle
Unit I Individual Project 1
BUS305
Instructor: John Theodore
13 January 2008
The Absolute Advantage
Economics has been recognized as a special area of study for over a century. Most of the challenging problems being confronted nationally and globally are economic in nature. According to Sullivan and Sherffrin, “absolute advantage is the ability of one person or nation to produce a good at a lower absolute cost than another person or nation”. Absolute advantages “can produce something using a smaller number of inputs than another party producing the same product” (Absolute Advantage, 2008).
For this assignment I was asked who would be the absolute advantage. I think that Francis would have the absolute advantage, producing two financial statements and answer ten calls in an hour period. Phil, however can only produce one statement and answer eight calls. I think that Francis should prepare the financial statement and be specialize in that area and Phil should answer the phone and be specialize in that area.
It would be the best opportunity that they divide the workload to accomplish more than what is needed to be done within that day. Francis can produce more than Phil in both jobs, but split it up you would get more work out of them both in one area.
Here is a graph with the result of who would have the best absolute advantage:
[pic]
References:
Absolute Advantage. Retrieve on 13 January 2008 from:
http://www.auburn.edu/~johnspm/gloss/absolute_advantage
Economics Meaning. Retrieved on 13 January 2008 from:
http://ingrimayne.com/econ/Introduction/Overview1.html
O’Sullivan, A. & Sheffrin, S. (2006). Economics: principles & tools (4th Ed.). Upper Sad ...