2.1 The entries in the table tell us that Barb has an absolute advantage over Pat in...
Question:
2.1 The entries in the table tell us that Barb has an absolute advantage over Pat in both activities. While Barb, the mechanic, can update 3 Web pages per hour, Pat, the programmer, can update only 2. Barb’s absolute advantage over Pat is even greater in the task of fixing bikes—3 repairs per hour versus Pat’s 1. But as in second example in this chapter, the fact that Barb is a better programmer than Pat does not imply that Barb should update her own Web page. Barb’s opportunity cost of updating a Web page is 1 bicycle repair, whereas Pat must give up only half a repair to update a Web page. Pat has a comparative advantage over Barb at programming and Barb has a comparative advantage over Pat at bicycle repair. LOl
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International Human Resource Management A Multinational Company Perspective
ISBN: 9780199258093
1st Edition
Authors: Monir Tayeb