Question

Scenario:Hector runs a small graphic-design company.He has two assistants. Sasha is very good at producing computer-generated graphics, but she is not as talented at designing logos. The other assistant, Maurice, is skilled at designing logos with pen and paper, but is not very efficient when working on the computer.In the past, Hector had Sasha and Maurice each perform some design and some computer work. Now, Hector is wondering whether this is a wise use of his resources.

Based on the information in the scenario, describe the absolute and comparative advantage held by each worker in Hector’s office.

Give your answer in the form of at least three sentences.

Answer 1

Absolute advantage: Sasha has an absolute advantage in producing computer-generated graphics (she is better at computer work), while Maurice has an absolute advantage in designing logos by hand (he is more skilled at sketching and logo creation with pen and paper).

Comparative advantage: Sasha has the comparative advantage in computer work because, relative to Maurice, she gives up less valuable logo-design output when she uses her time on the computer. Maurice has the comparative advantage in logo design because he gives up less computer-work output when he spends time designing by hand.

Therefore Hector would likely increase total output if Sasha concentrates on computer-generated graphics and Maurice concentrates on hand-drawn logo design.