Principles of Macroeconomics 7th Edition

Published by South-Western College
ISBN 10: 1-28516-591-8
ISBN 13: 978-1-28516-591-2

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

Answer

b. Ron is washing, David in mowing.

Work Step by Step

Since David can mow a lawn and only give up washing 2 cars, David has an absolute advantage in mowing since Ron would have to give up washing 3 cars. Since Ron can wash 3 cars and only give up mowing a lawn, Ron has an absolute advantage in washing since David could only wash 2 cars with giving up mowing a lawn. Whoever has the lower opportunity cost has the comparative advantage.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.