Question

4. Using the same amount of resources, Aanand can either build 6 models or prepare 4 experiments, and Pam can

either build 9 models or prepare 6 experiments. Who has the comparative advantage in building models and
who has the comparative advantage of preparing experiments?
a. Pam has a comparative advantage in building models; both people have a comparative advantage in
preparing experiments
b. Neither has a comparative advantage in producing either good
C. Aanand has a comparative advantage in building models and Pam has a comparative advantage in
preparing experiments
d. Both have a comparative advantage in producing both goods.

Answer 1

Aanand has a comparative advantage in building models because his opportunity cost for building models is lower. Neither Aanand nor Pam has a comparative advantage in preparing experiments since both have the same opportunity cost for preparing them. Therefore, the answer is C.

Step-by-step explanation:

To determine who has the comparative advantage in building models or preparing experiments, we need to compare the opportunity costs of both Aanand and Pam for the two activities. The opportunity cost is what each person must give up in order to produce one unit of the other good. For Aanand, the opportunity cost of building one model is ⅓ (or 0.6667) of an experiment (⅔ experiments per model). For Pam, the opportunity cost of building one model is ⅔ (or 0.6667) of an experiment (⅓ experiments per model). Aanand has a lower opportunity cost for building models, so Aanand has the comparative advantage in building models.

Now, let's calculate the opportunity cost for preparing experiments. Aanand's opportunity cost of preparing one experiment is 1.5 models (6 models per 4 experiments), whereas Pam's opportunity cost of preparing one experiment is 1.5 models as well (9 models per 6 experiments). Since both Aanand and Pam have to give up the same number of models to prepare one experiment, neither has a comparative advantage in preparing experiments. Hence, the correct answer is:

C. Aanand has a comparative advantage in building models and Pam has a comparative advantage in preparing experiments.

Answer 2

All answers are incorrect.

Step-by-step explanation:

Comparative advantage is "the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity.” Because both Pam and Aanand build models more efficiently than they prepare experiments, they both have a comparative advantage in building models. Your textbook sucks because none of the available answers reflect this. Even if the textbook were incorrectly comparing worker efficiency instead of overall product production efficiency, none of the answers reflect the fact that Pam has comparative advantage in producing both models and experiments. Burn the book, it's demonic and econ is for aspiring business people who will lose their souls and become the bane of the market.