Question

Prior to specialization, in an hour, you place five phone calls and process two applications. your colleague places six phone calls and processes two applications. after specialization, the gains from trade are _____ phone call(s) and _____ application(s).

Answer 1

After specialization, the gains from trade would result in 7 phone calls and 3 applications being handled collectively by you and your colleague.

Step-by-step explanation:

In this scenario, you initially place 5 phone calls and process 2 applications in an hour, while your colleague places 6 phone calls and process 2 applications. After specialization, the gains from trade would result in an increase in the number of phone calls and applications handled collectively.

Gains from trade:

1. You could potentially handle more phone calls as a result of specialization. Let's say you specialize in phone calls and your colleague specializes in processing applications. If you specialize solely in phone calls, you might be able to handle, for instance, 7 phone calls per hour.
2. On the other hand, since your colleague will be specializing in processing applications, they might be able to handle 3 applications per hour.

Therefore, after specialization, the gains from trade would result in 7 phone calls and 3 applications being handled collectively by you and your colleague.