The table below describes the production possibilities for Lee and Amy in a four-hour shift.
a. What is the opportunity cost of one coffee for each person? What is the opportunity cost of one croissant?
b. Who has a comparative advantage in coffees? Who has a comparative advantage in croissants?
c. Who has an absolute advantage in coffees? Who has an absolute advantage in croissants?
d. Who should produce coffees? Who should produce croissants?
Definitions:
Future Investment Opportunity
Potential projects or investments that a company could undertake in the future, which are expected to generate positive returns.
Net Present Value
A financial metric that calculates the value of a projected investment's net cash flows, discounted back to their present value.
Cash Flow
A measure of the amount of cash generated and used by a company in a given period, vital for assessing the health and liquidity of a business.
Health Canada
The federal department responsible for helping Canadians maintain and improve their health, ensuring access to high-quality health services.
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