Lizzie takes 20 seconds to stuff an envelope and 10 seconds to seal it.Arnold takes 15 seconds to stuff an envelope and 5 seconds to seal it.Lizzie has a comparative advantage in ________ and Arnold has a comparative advantage in ________.
A) sealing envelopes; stuffing them
B) stuffing envelopes; sealing them
C) neither of these activities; both activities
D) both activities; neither of these activities

Question

Quizplus · Accepted Answer

Comparative advantage is the ability to produce a good or service at a lower opportunity cost than another producer. In this scenario, Lizzie takes 20 seconds to stuff an envelope and 10 seconds to seal it, whereas Arnold takes 15 seconds to stuff an envelope and 5 seconds to seal it. The opportunity cost for Lizzie to stuff an envelope is 0.5 seconds of sealing time, and the opportunity cost for Arnold to stuff an envelope is 0.33 seconds of sealing time. Thus, Arnold has a lower opportunity cost of stuffing envelopes, and Lizzie has a lower opportunity cost of sealing envelopes. Therefore, Lizzie has a comparative advantage in sealing envelopes, and Arnold has a comparative advantage in stuffing envelopes. Choice B correctly identifies these activities.

Lizzie Takes 20 Seconds to Stuff an Envelope and 10