The Fishing Adventure: Harry vs Gus
Which fisherman has a comparative advantage in catching bluegills, and who has a comparative advantage in catching walleyes?
a) Harry has an absolute advantage in catching bluegills and walleyes.
b) Gus has an absolute advantage in catching bluegills and walleyes.
c) Harry has a comparative advantage in catching bluegills, and Gus has a comparative advantage in catching walleyes.
d) Harry has a comparative advantage in catching walleyes, and Gus has a comparative advantage in catching bluegills.
Final answer:
In the given scenario, Harry has a comparative advantage in catching bluegills because he sacrifices fewer bluegills per walleye (4 compared to Gus's 10). Alternatively, Gus has a comparative advantage in catching walleyes as he sacrifices fewer walleyes per bluegill.
Explanation:
The correct answer is: c) Harry has a comparative advantage in catching bluegills, and Gus has a comparative advantage in catching walleyes. Here's why:
In economics, a comparative advantage means that a person can produce a good or service at a lower opportunity cost than others. In this scenario, Harry catches 20 bluegills for every 5 walleyes, which means he gives up 4 bluegills for every walleye. Meanwhile, Gus gives up 10 bluegills for every walleye since he catches 20 bluegills for every 2 walleyes. Therefore, Harry has a lower opportunity cost when it comes to catching bluegills, indicating that Harry has a comparative advantage in catching bluegills. On the other hand, Gus has a lower opportunity cost in catching walleyes, indicating a comparative advantage for Gus in catching walleyes.