Mark is a computer company executive and earns $200 per hour managing the company and promoting its products. His daughter Regan is a high school student and earns $12 per hour helping her grandmother on the farm. Mark's computer is broken. He can repair it himself in one hour. Regan can repair it in 10 hours. Mark has a comparative advantage repairing the computer.

Question

Quizplus · Accepted Answer

Mark has a higher opportunity cost ($200 per hour) compared to Regan's opportunity cost ($12 per hour) for the time spent repairing the computer. Comparative advantage is about who gives up less to perform the task, which in this case would be Regan, not Mark.

Mark Is a Computer Company Executive and Earns $200 Per