Suppose Jim Is a Brilliant Attorney Who Can Draft Especially

question 98

Multiple Choice

Suppose Jim is a brilliant attorney who can draft especially persuasive legal briefs.He also happens to possess some excellent administrative skills such as typing,filing,assembling binders and notes,and making reservations.Which best describes whether Jim should hire an administrative assistant to help him?

• A) Jim should not hire an administrative assistant because he has an absolute advantage in performing administrative functions.
• B) Jim should not hire an administrative assistant because he likely has a comparative advantage in performing administrative functions.
• C) Jim should hire an administrative assistant because the assistant would likely have an absolute advantage in writing legal briefs.
• D) Jim should hire an administrative assistant because the assistant would likely have a comparative advantage in performing administrative functions.
• E) Jim should hire an administrative assistant because the assistant would likely have a comparative advantage in writing legal briefs.

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Definitions:

Fixed Cost

Costs that do not change with the level of production or sales volume, such as rent or salaries.

Other Expenses

Costs not directly related to the production of goods or services, including administrative and general expenses.

Planning Budget

A forecast that outlines future income, expenses, and financial goals, guiding financial decision-making over a specific period.

Fixed Cost

Fixed cost refers to business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, or insurance, integral to budgeting and planning.