Question

Randy and Frank are both landscapers. Randy can mow 8 lawns per day or prune 24 trees. Frank can mow 6 lawns per day or prune 12 trees. What is each man’s opportunity cost of mowing lawns? Who has a comparative advantage in each task, and who, if anyone, has an absolute advantage at each task?

Answer 1

Answer:

(a) Randy's opportunity cost of mowing lawns = $\frac{24}{8}$

                                                                       = 3

Therefore, 3 trees have to be foregone for mowing 1 lawn.

Randy's opportunity cost of pruning trees = $\frac{8}{24}$

                                                                       = 0.33

Therefore, 0.33 lawns have to be foregone for pruning 1 tree.

(b) Frank's opportunity cost of mowing lawns = $\frac{12}{6}$

                                                                       = 2

Therefore, 2 trees have to be foregone for mowing 1 lawn.

Frank's opportunity cost of pruning trees = $\frac{6}{12}$

                                                                       = 0.50

Therefore, 0.50 lawns have to be foregone for pruning 1 tree.

(c) Frank has a comparative advantage in mowing lawns and Randy has a comparative advantage in pruning trees.

(d) Randy has a absolute advantage in both, mowing lawns and pruning trees.