Use the following scenario to answer the questions that follow.
An economy has two workers, Smith and Ricardo. Every day they work, Smith can produce 4 computers or 16 smartphones, and Ricardo can produce 6 computers or 12 smartphones.
-________ has the comparative advantage in computers and ________ has the comparative advantage in smartphones.

Question

Quizplus · Accepted Answer

Ricardo has the comparative advantage in smartphones as he can produce 2 smartphones for every computer he could produce, whereas Smith can only produce 4 smartphones for every computer he could produce. Similarly, Smith has the comparative advantage in computers as he can produce 4 computers for every 1 smartphone he could produce, whereas Ricardo can only produce 0.5 computers for every smartphone he could produce. Therefore, it would be most efficient for Ricardo to specialize in producing smartphones and Smith to specialize in producing computers, leading to a total production output of 6 computers and 28 smartphones per day.

Use the Following Scenario to Answer the Questions That Follow