Table 3-9
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 3-9.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 3-9
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 3-9.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. If he also has a comparative advantage in setting up computers, it means he has a lower opportunity cost for setting up computers compared to others.

Table 3-9 Barb and Jim Run a Business That Sets Up and Up