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If Jason can wash a car in 20 minutes and wash a dog in 10 minutes and Megan can wash a car in 15 minutes and wash a dog in 15 minutes, which of the following statements is true? a. Megan can wash two cars in the time it takes Jason to wash a dog. b. The opportunity cost of washing a car is one dog bath for Jason. c. The opportunity cost of washing a car is greater for Megan. d. Jason has both a comparative and an absolute advantage in washing a dog. e. The opportunity cost of washing a dog is lower for Megan.

User Dwestgate
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Answer:

d. Jason has both a comparative and an absolute advantage in washing a dog.

Step-by-step explanation:

Comparative advantage in economics is the ability of an individual or country to produce a specific good or service at a lower opportunity cost better than another individual or country.

The comparative advantage gives a country a stronger sales margin than their competitors as they are able to sell their specific products or render their peculiar services at a lower opportunity cost.

In 1817, David Ricardo who is an english political economist talked about the law of comparative advantage in his book “On the Principles of Political Economy and Taxation."

Also, the principle of comparative advantage asserts that countries can become better off by specializing in what they do best.

This simply means that, any country applying the principle of comparative advantage, would enjoy an increase in output and consequently, a boost in their Gross Domestic Products (GDP).

An absolute advantage can be defined as the ability of an individual such as a producer to produce a good or provide a service in larger (greater) quantity for the same amount of money or the same quantity at a lesser cost or time. Thus, it's the superior capability of an individual over another using the same resources.

Hence, the statement which is true is that, Jason has both a comparative and an absolute advantage in washing a dog because he washes it in 10 minutes while it would take Megan 15 minutes.

User Ashishsingh
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