At Westonci.ca, we make it easy to get the answers you need from a community of informed and experienced contributors. Experience the ease of finding reliable answers to your questions from a vast community of knowledgeable experts. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.
Sagot :
Answer: B. Paul is relatively better at producing boats because he gives up fewer umbrellas per boat.
Explanation:
Comparative advantage is a notion introduced by famous economist, David Ricardo. It argues that entities should produce the goods that they have a lower opportunity cost in producing as this would prove they are better at producing said goods because they are more efficient.
In this scenario, Paul most definitely has a comparative advantage over Jessica in the production of boats because he has a lower opportunity cost of 40 umbrellas when he does so. He is therefore more efficient at it than Jessica.
The option that illustrates comparative advantage is Paul is relatively better at producing boats because he gives up fewer umbrellas per boat.
What is comparative advantage?
A person has comparative advantage in production of a good or service if it produces the good at a lower opportunity cost when compared to other people.
A person has a lower opportunity cost if it gives up fewer of other goods to produce a good. Paul has a comparative advantage in the production of boats. Jessica has a comparative advantage in the production of umbrellas.
Here are the options to this question:
A. Jessica produces fewer boats in a day than Paul, so she has comparative advantage in producing boats.
B. Paul is relatively better at producing boats because he gives up fewer umbrellas per boat.
C. Paul is better at producing boats because he can produce more boats in a day.
D. There is no comparative advantage in this case because Paul can produce more goods in a day.
E. Jessica produces fewer umbrellas in a day than Paul, so she has comparative advantage in producing boats.
To learn more about comparative advantage, please check: https://brainly.com/question/25812820
Visit us again for up-to-date and reliable answers. We're always ready to assist you with your informational needs. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.