Table 3.2

-Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?
A) April has a comparative advantage in painting kites but not snowboards.
B) April has a comparative advantage in painting snowboards but not kites.
C) April has a comparative advantage in painting both goods.
D) April does not have a comparative advantage in painting either good.

Question

Table 3.2
 
-Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?
A) April has a comparative advantage in painting kites but not snowboards. 
B) April has a comparative advantage in painting snowboards but not kites. 
C) April has a comparative advantage in painting both goods. 
D) April does not have a comparative advantage in painting either good.

Quizplus · Accepted Answer

Comparative advantage is determined by the opportunity cost of producing one good in terms of the other good. To find the opportunity cost, we compare the amount of one good that must be given up in order to produce an additional unit of the other good. 
For Jesse, the opportunity cost of painting one kite is 3/4 of a snowboard (12 kites/16 snowboards). The opportunity cost of painting one snowboard is 4/3 kites. 
For April, the opportunity cost of painting one kite is 2/3 of a snowboard (8 kites/12 snowboards). The opportunity cost of painting one snowboard is 3/2 kites. 
Comparing the opportunity costs, we see that April has a lower opportunity cost of painting snowboards (2/3 kite) compared to Jesse (4/3 kite). Therefore, April has a comparative advantage in painting snowboards. However, April has a higher opportunity cost of painting kites (3/2 snowboards) compared to Jesse (3/4 snowboards). Therefore, Jesse has a comparative advantage in painting kites. Thus, option B is the correct answer.

Table 3.2 -Consider Two Individuals, Jesse and April, Who Hand Paint Kites