Question

Scenario: Hector runs a small graphic-design company.He has two assistants. Sasha is very good at producing computer-generated graphics, but she is not as talented at designing logos. The other assistant, Maurice, is skilled at designing logos with pen and paper, but is not very efficient when working on the computer.In the past, Hector had Sasha and Maurice each perform some design and some computer work. Now, Hector is wondering whether this is a wise use of his resources

Based on the information in the scenario, describe the absolute and comparative advantage held by each worker in Hector’s office.

Give your answer in the form of at least three sentences

Answer 1

Sasha is very good at producing computer-generated graphics
Maurice is skilled at designing logos with pen and paper

To address the immediate problem, Hector's action should be to assign Maurice to do the design in a paper then pass it to Sasha for generating it on the computer. It could also be that if a client requests a paper design, Maurice does it and for computer-generated designs, Sasha will do it.

The corrective action that he should do is let Sasha and Maurice attend trainings for their weaknesses.

Answer 2

Each employee holds an absolute and comparative advantage in a category of work. Sasha has an absolute and comparative advantage when doing computer design because she is more efficient, and she is not giving up much of an opportunity cost. For the same reasons, Maurice has an absolute and comparative advantage when doing logo design.