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OleMash [197]
3 years ago
7

Sheila and Jim live in an island where they are the only two workers. Sheila can either catch 10 fish or gather 40 pounds of ber

ries each day, and Jim can either catch 8 fish or gather 24 pounds of berries each day. Both of them work 200 days per year. At current world prices 1 fish trades for 3.5 pounds of berries. Who has the comparative advantage in producing berries
Business
1 answer:
Firlakuza [10]3 years ago
7 0

Answer:

SHEILA

Explanation:

A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people.

Sheila's opportunity cost in producing berries = 10/40 = 0.25

Jim's opportunity  cost in producing berries = 8/24 = 0.33

Sheila has a lower opportunity cost in the production of berries and thus has a comparative advantage in the production of berries

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