Economics in Global Environment

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Details: 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.

Note that you are not given any initial or current production levels; you will not be able to calculate the gain from trade but you should discuss how comparative advantage is used. You do not have Francis and Phil current production levels and cannot construct a Table like Table 3.2 on page 46. The learning objective is to understand the reason for trade among people, among states, among regions and among nations. For this IP the opportunity cost should be presented with your answer based on the numerical information in this IP hide problem

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