Joan spends all her time making baskets, she makes four baskets a day, while Mark makes one basket. If, instead, they spend all day making staplers, they each make two. Who has a comparative advantage in baskets?

Question

Nikolai Montgomery

Social Studies

4 March, 01:28

Joan spends all her time making baskets, she makes four baskets a day, while Mark makes one basket. If, instead, they spend all day making staplers, they each make two. Who has a comparative advantage in baskets?

+4

Answers (2)

Know the Answer?

Autumn Atkins · Answer 1

Joan

Explanation:

Comparative Advantage is an economic term which refers to a situation where a country can produce more of a particular Commodity at a lower cost.

An individual or company is said to have comparative advantage in production if they can produce more units at a reduced cost.

Joan is said to have comparative advantage of producing basket because she produces more units (4) of basket that mark (1) at a lower cost (time).

Having a comparative advantage in production of a commodity doesn't mean Joan is more skilled in making baskets.

Leonard Mckenzie · Answer 2

Joan has comparative advantage in baskets.

Explanation:

Comparative advantage refers to the ability of an individual to manufacture a good or service at a low opportunity cost than another individual.

An individual is said to have a comparative advantage at producing something if he/she can produce it at lower cost than anyone else.

Joan has a comparative advantage in baskets because she produces four baskets in a day as compared to Mark that produces only one basket.