Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 3 - Part I - Interdependence and the Gains from Trade - Quick Check Multiple Choice - Page 59: 2

Answer

d.) Ron in washing, neither in mowing.

Work Step by Step

A "comparative advantage" is the ability to produce a good at a lower opportunity cost than another producer. Since Ron can wash more cars in an hour, he can wash a car in less time than David. Therefore, his opportunity cost--specifically the cost of his time--is lower than David's. Since they mow the same number of lawns in an hour, neither has a comparative advantage in mowing.
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