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John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry...

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. Why does Harry has a comparative advantage in typing? Why is having a comparative advantage important? What could John do to have an absolute advantage?
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Answer #1

Opportunity cost is shown in the brackets.

Why comparative advantage is important because it determines the better trade off. Comparative advantage is determined by calculating Opportunity costs of two trade or output. Lesser opportunity cost is more beneficial for the parties. Opportunity costs represent the potential benefits an individual, investor, or business misses out on when choosing one alternative over another. The idea of opportunity costs is a major concept in economics.

John is having absolute advantage in typing.

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