Nancy and Bill are auto mechanics. Nancy takes 2 hours to replace a clutch and 4 hours to replace a set of brakes. Bill takes 6 hours to replace a clutch and 4 hours to replace a set of brakes. State whether anyone has an absolute advantage at either task and, for each task, identify who has a comparative advantage.

Question

Konnor Pratt

Business

18 October, 03:10

Nancy and Bill are auto mechanics. Nancy takes 2 hours to replace a clutch and 4 hours to replace a set of brakes. Bill takes 6 hours to replace a clutch and 4 hours to replace a set of brakes. State whether anyone has an absolute advantage at either task and, for each task, identify who has a comparative advantage.

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Landin Levy · Answer 1

Nancy has both a comparative and absolute advantage in replacing clutches because she only takes 2 hours to replace a clutch, whereas Bill takes 6 hours. Nancy therefore is 3 times as efficient in her use of resources in replacing clutches.

With regards to replacing brakes, both individuals take 4 hours, so neither has either an absolute or comparative advantage.