Consider the following household.In 5 hours, Bob can cook 5 meals or clean 6 rooms.In 5 hours, Mary can cook 30 meals or clean 10 rooms.Select the best statement.
A)Mary has a comparative advantage in cooking and cleaning.
B)Bob has a comparative advantage in cooking.
C)Bob has an absolute advantage in the production of both goods.
D)Mary has a comparative advantage in cooking.
E)Since Mary is better at producing both goods, she should produce both.

Question

Quizplus · Accepted Answer

To determine comparative advantage, we need to compare the opportunity costs. Bob's opportunity cost of cooking one meal is giving up cleaning 6/5 rooms, while Mary's opportunity cost of cooking one meal is giving up cleaning 1/3 rooms. Thus, Mary has a lower opportunity cost of cooking and has a comparative advantage in cooking.

Consider the Following Household