Answer to Question #41642 in Macroeconomics for Velicia

Question

Pat and Kris are roommates. Pat takes 4 hours to brew a gallon of root beer and 2 hours to make a pizza. Kris takes 6 hours to brew a gallon of root beer and 4 hours to make a pizza. What is each roommate's opportunity cost of making a pizza? Who has the absolute advantage in making pizza? Who has comparative advantage in making pizza?

Answer 1

Pat:4 hours - gallon of beer, 2 hours - 1 pizza.
Kris: 6 hours - gallon of beer, 4 hours - 1 pizza.
Pat's opportunity cost of making a pizza = 0.5 gallon of beer
Krise's opportunity cost of making a pizza = 2/3 gallon of beer
So, Pat has the absolute advantage in making pizza, because she needs twice less time to make it.
And Pat also has comparative advantage in making pizza, because 0.5<2/3.