Scenario: Mark can make three tables and one chair in a day, while John can make four tables and one chair in a day.
-Refer to the scenario above.Which of the following is true in this case?

Question

Quizplus · Accepted Answer

John has both comparative and absolute advantage in making tables. This is because John can make four tables in a day, while Mark can only make three. Therefore, John has an absolute advantage in making tables. Additionally, John's opportunity cost of making a chair is lower than Mark's because John only needs to give up making four tables to make one chair, while Mark needs to give up making three tables to make one chair. This means that John also has a comparative advantage in making tables. Neither Mark nor John has an absolute or comparative advantage in making chairs because they can both only make one chair in a day.

Scenario: Mark Can Make Three Tables and One Chair in a Day