Consider the opportunity costs of producing goods X and Y that are listed for the four individuals above. Which person has a comparative advantage in producing good X?

Question

Quizplus · Accepted Answer

To determine who has a comparative advantage in producing good X, we can compare the opportunity costs of producing X for each individual. In other words, we look at what each individual gives up in terms of producing Y in order to produce more X. 
For Pramilla, producing one more unit of X means giving up four units of Y. 
For Sam, producing one more unit of X means giving up two units of Y. 
For George, producing one more unit of X means giving up six units of Y. 
For Lucas, producing one more unit of X means giving up three units of Y. 
Comparing these opportunity costs, we see that Sam has the lowest opportunity cost of producing X – he only gives up two units of Y to produce one more unit of X. Therefore, Sam has a comparative advantage in producing good X.

Consider the Opportunity Costs of Producing Goods X and Y