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Bette and Jamal are partners at a management consulting firm.

They are trying to determine which of them has a comparative advantage in creating the 50 slides required for a sales pitch to a prospective client.

Bette can create 15 slides per hour. For other activities, she can bill clients $750 per hour. Bette's opportunity cost of creating slides is$---- per slide.

Jamal's opportunity cost of creating slides is 30% lower than Bette's. However, as the senior partner, his billing rate is 25% higher. Based on all of these facts,----- has a comparative advantage in creating slides.

Respuesta :

Answer:

Jamal

Explanation:

Given that

Number of required slides = 50 slides

Creating slides Per hour = 15 slides

Bill amount per hour = $750

So by considering the above information, Bette's opportunity cost of creating slides would be

= Bill amount per hour ÷ creating slides per hour

= $750 ÷ 15 per hour

= $50

For making 50 slides, the opportunity cost would be

= $50 × 50 slides

= $2,500

And, Jamal opportunity cost is 30% lower, so it would be  

= $50 - $50 × 30%

= $50 - $15

= $35

And, the billing rate is 25% higher, so it would be

= $750 + $750 × 25%

= $750 + $187.50

= $937.50

So in one hour, it would be

= $937.50 ÷ 35 slides

= 26 slides

Based on the creating slides, the Jamal gains a competitive advantage over Bette

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