If Paddy spends all of his time producing waffles, he can produce 3,000 waffles per week....

If Paddy spends all of his time producing waffles, he can produce 3,000 waffles per week. If, instead, he spends all of his time growing strawberries, he can grow 1,000 pints of strawberries per week. If Thomas spends all of his time producing waffles, he can produce 500 waffles per week. If, instead, he spends all of his time growing strawberries, he can grow 250 pints of strawberries per week. Which of these two persons has a comparative advantage (compared to the other) at producing strawberries?

	a.	Paddy
	b.	Thomas
	c.	There is insufficient information to answer this question
	d.	DO NOT CHOOSE THIS ANSWER

Expert Solution

b. Thomas

(Paddy's opportunity cost of a strawberry = waffles given up/strawberries produced = 3000/1000 = 3 waffles
Thomas' opportunity cost of a strawberry = waffles given up/strawberries produced = 500/250 = 2 waffles
So, Thomas has a comparative advantage at producing strawberries because of lower opportunity cost.)

Rahul Sunny answered 2 years ago

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Question

If Paddy spends all of his time producing waffles, he can produce 3,000 waffles per week....

Solutions

Expert Solution

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