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Larry and Megan run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. It takes Larry 20 hours to prepare the food for an event and 5 hours of effort to get each new client. For Megan, it takes 4 hours to prepare food for an event and 2 hours to get a new client. In this scenario, ______ has an absolute advantage in food preparation, and ______ has a comparative advantage in food preparation. Suppose that initially, Larry and Megan are splitting both tasks for a large number of events. Then they decide to start shifting some work according to the principle of comparative advantage. In particular, the person with the comparative advantage in food preparation will take over preparing food for one more event by taking the necessary time away from getting more clients, and the other person will use the freed-up time from not preparing food for one event to get more clients. As a result, the total number of events for which food is prepared will remain unchanged, but the number of new clients will increase by ______. 

          Larry and Megan run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. It takes
Larry 20 hours to prepare the food for an event and 5 hours of effort to get each new client. For Megan, it takes 4 hours to prepare food for an event
and 2 hours to get a new client.
In this scenario, ______ has an absolute advantage in food preparation, and ______ has a comparative advantage in food
preparation.
Suppose that initially, Larry and Megan are splitting both tasks for a large number of events. Then they decide to start shifting some work according to
the principle of comparative advantage. In particular, the person with the comparative advantage in food preparation will take over preparing food for
one more event by taking the necessary time away from getting more clients, and the other person will use the freed-up time from not preparing
food for one event to get more clients.
As a result, the total number of events for which food is prepared will remain unchanged, but the number of new clients will increase by ______.
Show more…
Larry and Megan run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. It takes Larry 20 hours to prepare the food for an event and 5 hours of effort to get each new client. For Megan, it takes 4 hours to prepare food for an event and 2 hours to get a new client. In this scenario, has an absolute advantage in food preparation, and has a comparative advantage in food preparation. Suppose that initially, Larry and Megan are splitting both tasks for a large number of events. Then they decide to start shifting some work according to the principle of comparative advantage. In particular, the person with the comparative advantage in food preparation will take over preparing food for one more event by taking the necessary time away from getting more clients, and the other person will use the freed-up time from not preparing food for one event to get more clients. As a result, the total number of events for which food is prepared will remain unchanged, but the number of new clients will increase by .

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Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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Larry and Megan run a catering business in which they have two major tasks: getting new clients and preparing food for events and parties. It takes Larry 20 hours to prepare the food for an event and 5 hours of effort to get each new client. For Megan, it takes 4 hours to prepare food for an event and 2 hours to get a new client. In this scenario, Larry has an absolute advantage in food preparation, and Megan has a comparative advantage in food preparation. Suppose that initially, Larry and Megan are splitting both tasks for a large number of events. Then they decide to start shifting some work according to the principle of comparative advantage. In particular, the person with the comparative advantage in food preparation will take over preparing food for one more event by taking the necessary time away from getting more clients, and the other person will use the freed-up time from not preparing food for one event to get more clients. As a result, the total number of events for which food is prepared will remain unchanged, but the number of new clients will increase by.
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Transcript

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00:01 According to the problem we have to find the invariant we have to find the invariant distribution of invariant distribution of number of customers of number of customers so first we have to determine the steady state probability first to find this we have to determine the steady state probability we have to find the steady state probability so let's denote this by using pi i so what is basically pi i it is the probability it is the probability of having of having i customers i customers in the restaurant in restaurant okay so when a customer arrives they have a probability of when the customer arrives they have the probability of n divided by n divided by n plus 1 we have the probability as n divided by n plus 1 ok so we have to probability that n divided by n plus 1 to leave without a placing of an…
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