Give an example in which one person has an absolute advantage in doing something but another person has a comparative advantage.
Sure! Let's consider a scenario where two friends, Alex and Sam, are trying to decide how to divide their household chores. Alex is a faster and more efficient cleaner, so they have an absolute advantage in cleaning. On the other hand, Sam is a better cook and can prepare meals more skillfully, giving them a comparative advantage in cooking.
To illustrate, let's say Alex can clean the entire house in two hours, while Sam takes four hours to do the same. In this case, Alex has an absolute advantage in cleaning because they can do it faster and more efficiently.
However, when it comes to cooking, Sam can prepare delicious meals in just one hour, while Alex takes two hours. Although Alex could still cook, Sam has a comparative advantage in this task because they can cook more quickly compared to Alex.
Based on their individual strengths and advantages, it would be more efficient if Alex focused on cleaning and Sam focused on cooking. By specializing in their respective tasks, they can maximize their skills and ultimately be more productive. This is the concept of comparative advantage, where individuals or countries specialize in what they do best, thus maximizing overall economic efficiency.