The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time b
etween building wooden boats and solving crimes. Refer to these figures to answer the following questions.
1 answer:
Answer:
- Gibb's opportunity cost of solving a crime = 3 wooden boats / 30 = 0.1 wooden boats
- DiNozzo's opportunity cost of solving a crime = 1 wooden boat / 20 = 0.05
Even though DiNozzo has a comparative advantage in solving crimes (0.05 wooden boats per crime < 0.1 wooden boats per crime), Gibb's has an absolute advantage in solving crimes because he can solve 30 while DiNozzo can only solve 20 (Gibbs has also an absolute advantage in building wooden boats).
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