Lou and Alex live together and share household chores.They like to cook some meals ahead and eat leftovers.Suppose that in one hour Lou and Alex can do the following:

-Which of the following is true?
A) Lou has both an absolute and comparative advantage over Alex in both tasks.
B) Alex has both an absolute and comparative advantage over Lou in both tasks.
C) Alex has a comparative advantage over Lou in cleaning.
D) Lou has a comparative advantage over Alex in cleaning.
E) Neither Alex nor Lou has a comparative advantagE.

Question

Lou and Alex live together and share household chores.They like to cook some meals ahead and eat leftovers.Suppose that in one hour Lou and Alex can do the following:
 
-Which of the following is true?
A) Lou has both an absolute and comparative advantage over Alex in both tasks. 
B) Alex has both an absolute and comparative advantage over Lou in both tasks. 
C) Alex has a comparative advantage over Lou in cleaning. 
D) Lou has a comparative advantage over Alex in cleaning. 
E) Neither Alex nor Lou has a comparative advantagE.

Quizplus · Accepted Answer

In order to determine comparative advantage, we need to look at the opportunity cost of the tasks. Opportunity cost is the value of the next best alternative forgone.

For cooking meals ahead, we know that Lou can cook 2 meals or clean the house in 1 hour. So the opportunity cost of cooking for Lou is cleaning the house for 2 meals per hour. For Alex, the opportunity cost of cooking is cleaning the house for 1 meal per hour. Therefore, Lou has a lower opportunity cost for cooking meals ahead and has a comparative advantage in this task.

For cleaning, we know that Alex can clean the house in 1 hour or cook 1 meal. So the opportunity cost of cleaning for Alex is cooking 1 meal per hour. For Lou, the opportunity cost of cleaning is cooking 0.5 meals per hour. Therefore, Lou has a lower opportunity cost for cleaning and has a comparative advantage in this task.

Therefore, the correct answer is D, Lou has a comparative advantage over Alex in cleaning.

Lou and Alex Live Together and Share Household Chores