Final answer:
The statement that one person cannot have comparative advantage in both activities if there are only two people involved is false. Comparative advantage exists when a person has the lowest relative opportunity cost in an activity, even if they are more efficient in both activities.
Step-by-step explanation:
The statement that it is impossible for one person to have a comparative advantage in both activities when there are only two activities and two people is False. The concept of comparative advantage is centered around individuals or entities focusing on the production of goods or services where they have the lowest opportunity cost. For instance, if one person is relatively better at doing one activity compared to another, then they have the comparative advantage in that activity, regardless of their level of productivity or efficiency in another activity. This applies even if the second person is not as efficient in either activity; comparative advantage is about the relative difference in opportunity costs.
An example to illustrate this is Jethro, who may be 80% faster at building fires and cooking meals but only 10% faster at setting up tents compared to his friends. Jethro still has the comparative advantage in cooking and building fires, even though he is also more efficient at setting up tents. His friends should focus on tasks where their productivity disadvantage is smallest. So, comparative advantage does not rule out the possibility of one person being more efficient in multiple activities, but it dictates specialization based on relative efficiency and opportunity cost.