Riley and Chad run a water sports business in Noosa. They have to wash the surfboards/kayaks each time they are used and need to decide who should wash what to minimise opportunity cost. Surfboards(quantity/hr)Kayaks(quantity/hr)Riley4530Chad3040 Which of the following statements are true: Chad should specialise in washing kayaks. Riley has a comparative advantage in washing surfboards. Riley's opportunity cost of washing 1 kayak is washing 1.5 surfboards. Riley should specialise in washing surfboards because he has an absolute advantage in washing surfboards.

Absolute advantage is the ability to produce a good or service using fewer resources (inputs) than…

Answered: Riley and Chad run a water sports…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Riley and Chad run a water sports business in Noosa. They have to wash the surfboards/kayaks each time they are used and need to decide who should wash what to minimise opportunity cost.

Surfboards

(quantity/hr)

Kayaks

(quantity/hr)

Riley

Chad

Which of the following statements are true:

		Chad should specialise in washing kayaks.
		Riley has a comparative advantage in washing surfboards.
		Riley's opportunity cost of washing 1 kayak is washing 1.5 surfboards.
		Riley should specialise in washing surfboards because he has an absolute advantage in washing surfboards.

Definition Video Definition Ability of a country to produce more output with a given level of input or to produce the same level of output with a lower level of input as compared to the other countries. For example, if Country A produces 200 units with the help of 10 units of labor, and Country B produces 300 units with 10 units of labor, Country A has an absolute advantage in the production of the good. Video

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