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18 September, 12:02

The table below represents the output of Poems and TV Commercials per day by two authors: Krystal or Mark:

Krystal

Mark

Writing Poems 8 12

Writing TV Commercials 2 4

Which of the following statements is true ?

A. Mark has a comparative advantage in both writing TV commercials and writing poems.

B. Krystal has a comparative advantage in both writing TV commercials and writing poems.

C. Mark has a comparative advantage in writing TV commercials and Krystal has a comparative advantage in writing poems.

D. Krystal has a comparative advantage in writing TV commercials and Mark has a comparative advantage in writing poems.

+3
Answers (1)
  1. 18 September, 12:03
    0
    C. Mark has a comparative advantage in writing TV commercials and Krystal has a comparative advantage in writing poems.

    Explanation:

    Mark has absolute advantage in both as it can outproduce Krystal in both, ppoems and TB commercials

    now, referring to comparative advantage:

    Mark opportunity cost for TV comm: 12/4 = 3

    Krystal opportunity cost for TV comm: 8/2 = 4

    It has comparative advantage doing TV comm as it renounce to less poems

    Mark opportunity cost for poems: 4/12 = 1/3

    Krystal opportunity cost for poems: 2/8 = 1/4

    Krystal has a comparative advantajge as it renounce to a quarter of TB commercial per poem while Mark to a third
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Home » Business » The table below represents the output of Poems and TV Commercials per day by two authors: Krystal or Mark: Krystal Mark Writing Poems 8 12 Writing TV Commercials 2 4 Which of the following statements is true ? A.
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