John takes 10 minutes to iron a shirt and 20 minutes to type a paper.Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper.Which of the following statements is correct?

A) Harry has a comparative advantage in ironing.
B) Harry has a comparative advantage in typing.
C) Harry has an absolute advantage in typing.
D) Harry has an absolute advantage in ironing.
E) Neither can gain from specialization and exchange.

Question

Angel Thomas · Accepted Answer

Final Answer : A, Explanation :  Harry has a comparative advantage in ironing because he takes the same amount of time as John to iron a shirt (10 minutes), but takes longer to type a paper (30 minutes compared to John's 20 minutes). Comparative advantage is about who gives up less of other goods to produce a good, and in this case, Harry gives up less (in terms of time spent on typing) by specializing in ironing.

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