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Business, 06.09.2019 20:30, SophieCasey
Ginny and eric are partners at an architecture firm. they are trying to determine which of them has a comparative advantage in building the 25 models required for a presentation to a prospective client. ginny can build 20 models per hour. for other activities, she can bill clients $400 per hour. ginny’s opportunity cost of building models is per model. eric’s opportunity cost of building models is 35% higher than ginny’s. therefore, has a comparative advantage in building models.
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