Bob and Erik are both experienced in making pizzas and burgers. In one day, Bob can make 8 pizzas or 32 burgers. With the same effort and in the same day, Erik can make 12 pizzas or 36 burgers.Who has the absolute advantage in making pizzas and who has the absolute advantage in making burgers?Who has the comparative advantage in each activity? Show your derivations.According to the principle of comparative advantage, in which activity should eachperson (Bob and Erik) specialize in order to gain from trade?Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Bob and Erik are both experienced in making pizzas and burgers. In one day, Bob can make 8 pizzas or 32 burgers. With the same effort and in the same day, Erik can make 12 pizzas or 36 burgers.

Who has the absolute advantage in making pizzas and who has the absolute advantage in making burgers?
Who has the comparative advantage in each activity? Show your derivations.
According to the principle of comparative advantage, in which activity should each

person (Bob and Erik) specialize in order to gain from trade?

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

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