-The figure above shows Prakash's and Gail's production possibilities frontiers for writing books and magazine articles.
a) What is Prakash's opportunity cost of a book? What is Gail's opportunity cost? Who has the comparative advantage in writing books?
b) Who has the comparative advantage in writing magazine articles?
c) According to their comparative advantages, who should write books and who should write magazine articles?
Definitions:
Index Funds
Mutual funds or exchange-traded funds (ETFs) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments.
Managed Mutual Funds
Programs invested in by shareholders that operate with a mix of different investments, all overseen by experienced investment professionals.
Rate of Return
The increase or decrease in the value of an investment during a particular time frame, presented as a percentage of the investment’s original price.
Private Saving
The portion of individuals' or households' income that is not used for consumption or paying taxes, typically used for investment or future spending.
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