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Look for the Advantage
Loyal learners, here are a few tasks of justice that need your attention. Let's look at the idea of comparative advantage. A comparative advantage is simply the ability to produce a good or service at a lower opportunity cost than some other producer.

Look at the table below and compare Jack's opportunity cost of car repair to Andy's.

  Opportunity Cost of 1 Car Repair
Photo of Jack Jack 1 shoveled driveway
Photo of Andy Andy 2 shoveled driveways

Given what you see, who has the "advantage" in terms of opportunity cost when doing car repairs?

A. Jack

B. Andy

Let's try another. Remember, with comparative advantage, we are comparing the opportunity cost of two entities. Whoever gives up less has the comparative advantage.

This time, let's consider the reverse scenario by referring to the table below. For every two driveways Jack shovels, he gives up two car repairs. For every two driveways Andy shovels, he gives up one car repair.

  Opportunity Cost of 2 Shoveled Driveways
Photo of Jack Jack 2 car repairs
Photo of Andy Andy 1 car repair

In terms of opportunity cost and snow shoveling, who has the comparative advantage?

A. Jack

B. Andy

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