Answered: Once again, In an hour, Mateo can wash…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Once again, In an hour, Mateo can wash 2 cars or mow 1 lawn, and Tyler can wash 3 cars or mow

1 Lawn. Who has the comparive advantage in car washing and who has the camparative advantage in lawn mowing?

a. Mateo in washing, Tyler in mowing

b.Tyler in washing, Mateo in mowing.

c. Mateo in washing, nither in mowing.

d. Tyler in washing, neither in mowing.

Definition Video Definition Ability of a country to produce goods and services at a lower opportunity cost compared to other countries. Here, opportunity cost refers to the forgone units of one good in order to produce one more unit of another good. For example, the opportunity cost of producing good X in country A is 2Y and in country B is 1.25Y. Country B has a lower opportunity cost of producing good X than country A. Therefore, country B has a comparative advantage in the production of good X. Video

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