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)Bob has an absolute advantage in the production of both goods.
B)Since Mary is better at producing both goods,she should produce both.
C)Bob has a comparative advantage in cooking.
D)Mary has a comparative advantage in cooking.
E)Mary has a comparative advantage in cooking and cleaning.

Question

Quizplus · Accepted Answer

Bob can produce 1 meal in an hour or clean 1.2 rooms in an hour (5 meals/5 hours = 1 meal/hour, 6 rooms/5 hours = 1.2 rooms/hour). Mary can produce 6 meals in an hour or clean 2 rooms in an hour (30 meals/5 hours = 6 meals/hour, 10 rooms/5 hours = 2 rooms/hour). Mary has a comparative advantage in cooking since she can produce 6 meals in an hour compared to Bob's 1 meal in an hour. Therefore, Bob should specialize in cleaning and Mary should specialize in cooking.

Consider the Following Household