John and Jack run a car washing business. In one week John can wash 36 cars or he can wax 20 cars. In one week Jack can wax 12 cars or wash 24 cars. Based on the information given, has an absolute advantage in washing cars and has a comparative advantage in washing cars.

John and Jack run a car washing business. In one week John can wash 36 cars or he can wax 20 cars. In one week Jack can wax 12 cars or wash 24 cars. Based on the information given, has an absolute advantage in washing cars and has a comparative advantage in washing cars.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 6QCMC

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

John and Jack run a car washing business. In one week John can wash 36 cars or he can
wax 20 cars. In one week Jack can wax 12 cars or wash 24 cars.
Based on the information given,
has an absolute advantage in washing cars and
has a comparative advantage in washing cars.
O Jack : John
O John : John
O John : Jack
O Jack : Jack
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