In one hour, John can prepare 2 income tax returns

| December 14, 2017

In one hour, John can prepare 2 income tax returns or 4 financial statements. In one hour, Frank can prepare 1 income tax return or 3 financial statements. Frank and John currently work separately, and they are deciding whether to continue working alone or to work together. If they continue working separately, each of them must continue to produce both tax returns and financial statements. In this example, the value of one tax return and one financial statement is the same. Based on the above information on comparative advantage:A. Frank should specialize in preparing financial statements in a joint effort.B. Frank should specialize in preparing tax returns in a joint effort.C. John should work alone, preparing both tax returns and financial statements.D. There is not enough information to know whether they should work alone or combine their efforts.

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