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Question: Wade and Marti are thinking about swapping services. If Wade works one hour he can type two pages of a report or clean and gap four spark plugs. Marti, working one hour, can type three pages or clean and gap eight spark plugs. Who has the absolute advantage in typing? According to the theory of comparative advantage, who should do the typing? Give an example of an exchange rate that would prove mutually advantageous. Explain your reasoning for each question.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92291465

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