Respuesta :
If David's opportunity cost of 1 shirt is 6 shoes and kara’s opportunity cost of 1 shirt is 5 shoes, then Kara has a comparative advantage in the production of shirts.
What is comparative advantage?
- In an economic model, agents have a comparative advantage over others if they can produce that good at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to the trade.
- Comparative advantage describes the economic reality of trade advantages for people, firms, or nations as a result of disparities in their factor endowments or technological progress.
- What you accomplish best while giving up the least is referred to as comparative advantage.
- For example, if you're a fantastic plumber as well as a fantastic babysitter, your comparative advantage is in plumbing.
Therefore, if David's opportunity cost of 1 shirt is 6 shoes and kara’s opportunity cost of 1 shirt is 5 shoes, then Kara has a comparative advantage in the production of shirts.
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