Question

This table shows the production possibility schedule for several toothpaste companies.


Toothpaste company



Large tubes



Small tubes



1



Sparkling



100 per hour



200 per hour



2



Bright White



100 per hour



250 per hour



3



Fresh!



200 per hour



250 per hour



4



Mmmint



150 per hour



150 per hour





Use the numbers to place the companies in order of greatest comparative advantage to least comparative advantage in producing small tubes of toothpaste.

2, 1, 3, 4
1, 2, 3, 4
4, 3, 1, 2
2, 1, 4, 3

Answer 1

2, 1, 3, 4

Calculation of opportunity cost of one small tube (in large tubes):
- Sparkling (1): 100/200 = 0.5 large
- Bright White (2): 100/250 = 0.4 large
- Fresh! (3): 200/250 = 0.8 large
- Mmmint (4): 150/150 = 1 large

Lower opportunity cost = greater comparative advantage, so order is 2, 1, 3, 4.