Eileen has a comparative advantage over Jan in piano tuning,but not shoe polishing.Therefore,_____.
A)Jan must have an absolute advantage in piano tuning
B)Eileen must have an absolute advantage in shoe polishing
C)Jan must have a lower opportunity cost of shoe polishing
D)Eileen must have an absolute advantage in shoe polishing and in piano tuning
E)Eileen must have an absolute advantage in piano tuning

Question

Quizplus · Accepted Answer

Comparative advantage means that one person can produce a good or service at a lower opportunity cost than another person. In this case, Eileen has a comparative advantage in piano tuning, meaning she has a lower opportunity cost of tuning pianos than Jan. However, it does not necessarily mean that she has an absolute advantage in piano tuning (i.e., she can produce more pianos per hour than Jan). Likewise, Jan may have a lower opportunity cost of shoe polishing, which is why Eileen does not necessarily have an absolute advantage in shoe polishing either. Therefore, choice C is the best option as it acknowledges the possibility that Jan may have a lower opportunity cost of shoe polishing than Eileen.

Eileen Has a Comparative Advantage Over Jan in Piano Tuning,but