Homer and Teddy are stranded on a desert island.To feed themselves each day they can either catch fish or pick fruit.In a day,Teddy could pick 60 pieces of fruit or catch 20 fish.Homer could pick 100 pieces of fruit or catch 150 fish.Which of the following is correct?
A) Homer has a comparative advantage in catching fish and Teddy has a comparative advantage in picking fruit.
B) Homer has a comparative advantage in picking fruit and Teddy has a comparative advantage in catching fish.
C) Homer has a comparative advantage in both catching fish and picking fruit.
D) Teddy has a comparative advantage in both catching fish and picking fruit.

Question

Quizplus · Accepted Answer

Homer's opportunity cost of catching 1 fish is 2/3 of a fruit, while Teddy's is 3 fruits. Homer has a lower opportunity cost in catching fish. Teddy's opportunity cost of picking 1 fruit is 1/3 of a fish, while Homer's is 1.5 fish. Teddy has a lower opportunity cost in picking fruit.

Homer and Teddy Are Stranded on a Desert Island