Question

A computer system engineer could paint his house, but it makes more sense for him to hire a painter to do it. Explain Why.

Answer 1

There are two concerns in this issue. Firstly, the opportunity cost faced by the engineer is greater because of his lost earnings in relative to the opportunity cost faced by a painter. This opportunity cost might be greater than the cost of hiring a painter so the engineer saves money when he hires a painter. Second, it is the specialization that a painter possesses due to continuous practice and experience (comparative advantage) which the engineer does not have. In this way it makes more sense for him to hire a painter to do it