Suppose you and a classmate decide to split up tasks for a group project. In two hours you can write 6 pages of a paper or create 24 presentation slides. Your classmate can write 4 pages of a paper or create 20 slides. Assume that your work is of equal quality. Do you have a comparative advantage in production?
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Suppose you and a classmate decide to split up tasks for a group project. In two hours you can write 6 pages of a paper or create 24 presentation slides. Your classmate can write 4 pages of a paper or create 20 slides. Assume that your work is of equal quality. Do you have a comparative advantage in production?
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Your opportunity cost of producing a page of the paper is 4 presentation slides, while your classmate's opportunity cost of producing a page of the paper is 5 presentation slides. Because you have a lower opportunity cost to write the paper, you have a comparative advantage in writing the paper. However, you do not have a comparative advantage in producing the presentation slides because your opportunity cost of producing a presentation slide is greater than your classmate's (1/4 of a page of the paper, while your classmate's is 1/5 of a page of the paper).
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