Question

Nobel laureate Paul Samuelson said that comparative advantage is one of the few ideas in economics that is both "true and not obvious." Since it's not obvious, we should practice with it a bit. In each of the following cases below, who has the absolute advantage at each task, and who has the comparative advantage?
a. In 30 minutes, Kana can either make miso soup or she can clean the kitchen. In 15 minutes, Mitchell can make miso soup; it takes Mitchell and hour to clean the kitchen.
b. In one hour, Ethan can bake 20 cookies or lay the drywall for two rooms. In one hour, Sienna can bake 100 cookies or lay the drywall for three rooms.
c. Kara can build two glass sculptures per day or she can design two full-page newspaper advertisements per day. Sara can build one glass sculpture per day or design four full-page newspaper ads per day.
d. Data can write 12 excellent poems per day or solve 100 difficult physics problems per day. Riker can write one excellent poem per day or solve 0.5 difficult physics problems per day.

Answer 1

Answer:

Explanation:

Absolute advantage refers to the ability to produce the same good or service using fewer inputs than another producer.

Comparative Advantage refers to the ability to produce a good or service at a lower opportunity cost than another producer.

For A.

Mitchell has the absolute advantage in soup.

Kana has the absolute advantage in cleaning.

Mitchell has the comparative advantage in soup.

Kana has the comparative advantage in cleaning.

For B.

Sienna has the absolute advantage in cookies.

Sienna has the absolute advantage in drywall.

Sienna has the comparative advantage in cookies.

Ethan has the comparative advantage in drywall.

For C.

Kara has the absolute advantage in sculptures.

Sara has the absolute advantage in ads.

Kara has the Comparative advantage in sculptures.

Sara has the comparative advantage in ads.

For D.

Data has the absolute advantage in poems.

Data has the Absolute advantage in physics.

Riker Comparative advantage in poems.

Data Comparative advantage in physics.