Question

Alejandro and Roger are working on a group project for class that requires writing a paper and designing charts to explain the information contained in the paper. Alejandro can write three pages of the paper in the same time it takes him to create two charts. Roger can write two pages of the paper in the same time he can produce a single chart. What is the opportunity cost for each to produce a single page of the essay? Based on the opportunity cost, who has the comparative advantage in writing the essay?

Answer 1

As per the given informtation, we have:

For Alejandro : Time taken to write 3 Pages = Time taken to create 2 Charts

For Roger : Time taken to write 2 Pages = Time taken to create 1 Chart

Opportunity cost is the cost of next best alternative. So, to find the opportunity cost of writing a single page of essay for both of them we see if they were not writing the page, what would they have done.

So, for Alejandro he would have completed 2/3rd (66.66%) of the Chart.

And, for Roger he would have completed 1/2th (50%) of the Chart.

So, we can clearly see that Roger has comparitive advantage in writing the essay and Alejandro has the comparitive advantage in creating the chart.