The table below represents the output of Poems and TV Commercials per day by two​ authors: Krystal or​ Mark:

Krystal
Mark
Writing Poems 8 12
Writing TV Commercials 2 4

Which of the following statements is true​?

A. Mark has a comparative advantage in both writing TV commercials and writing poems.
B. Krystal has a comparative advantage in both writing TV commercials and writing poems.
C. Mark has a comparative advantage in writing TV commercials and Krystal has a comparative advantage in writing poems.
D. Krystal has a comparative advantage in writing TV commercials and Mark has a comparative advantage in writing poems.

Respuesta :

Answer:

C. Mark has a comparative advantage in writing TV commercials and Krystal has a comparative advantage in writing poems.

Explanation:

Mark has absolute advantage in both as it can outproduce Krystal in both, ppoems and TB commercials

now, referring to comparative advantage:

Mark opportunity cost for TV comm: 12/4 = 3

Krystal opportunity cost for TV comm: 8/2 = 4

It has comparative advantage doing TV comm as it renounce to less poems

Mark opportunity cost for poems: 4/12 = 1/3

Krystal opportunity cost for poems: 2/8 = 1/4

Krystal has a comparative advantajge as it renounce to a quarter of TB commercial per poem while Mark to a third