Table 3-28
Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies.

-Refer to Table 3-28. Jim has an absolute advantage in
A)both setting up and testing computers and a comparative advantage in setting up computers.
B)both setting up and testing computers and a comparative advantage in testing computers.
C)neither setting up nor testing computers and a comparative advantage in setting up computers.
D)neither setting up nor testing computers and a comparative advantage in testing computers.

Question

Table 3-28
Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies.
​ 
-Refer to Table 3-28. Jim has an absolute advantage in
A)both setting up and testing computers and a comparative advantage in setting up computers. 
B)both setting up and testing computers and a comparative advantage in testing computers. 
C)neither setting up nor testing computers and a comparative advantage in setting up computers. 
D)neither setting up nor testing computers and a comparative advantage in testing computers.

Quizplus · Accepted Answer

Jim has an absolute advantage in both tasks if he can perform them more efficiently than others. A comparative advantage in setting up computers means he has a lower opportunity cost in that task compared to others.

Table 3-28 Barb and Jim Run a Business That Sets Up and Up