david takes 10 minutes to process a customer, and 20 minutes to stock the shelves. danny takes 15 minutes to…

david takes 10 minutes to process a customer, and 20 minutes to stock the shelves. danny takes 15 minutes to process a customer, and 15 minutes to stock the shelves. which of the following statements is true? danny has a comparative advantage in processing customers and in stocking shelves. danny has an absolute advantage in performing both tasks. danny has a comparative advantage in processing customers but not in stocking shelves. david has an absolute advantage in performing both tasks. david has a comparative advantage in processing customers but not in stocking shelves.

david takes 10 minutes to process a customer, and 20 minutes to stock the shelves. danny takes 15 minutes to process a customer, and 15 minutes to stock the shelves. which of the following statements is true? danny has a comparative advantage in processing customers and in stocking shelves. danny has an absolute advantage in performing both tasks. danny has a comparative advantage in processing customers but not in stocking shelves. david has an absolute advantage in performing both tasks. david has a comparative advantage in processing customers but not in stocking shelves.

Answer

Explanation:

Step1: Define absolute and comparative advantage

Absolute advantage is when one can produce a good or service using fewer resources (here time). Comparative advantage is when one has a lower opportunity - cost.

Step2: Analyze absolute advantage for processing customers

David takes 10 minutes to process a customer and Danny takes 15 minutes. David takes less time, so David has an absolute advantage in processing customers.

Step3: Analyze absolute advantage for stocking shelves

David takes 20 minutes to stock shelves and Danny takes 15 minutes. Danny has an absolute advantage in stocking shelves.

Step4: Calculate opportunity - cost for processing customers

For David, to process 1 customer (10 minutes), he gives up $\frac{10}{20}=0.5$ units of shelf - stocking. For Danny, to process 1 customer (15 minutes), he gives up $\frac{15}{15} = 1$ unit of shelf - stocking. David has a lower opportunity - cost in processing customers.

Step5: Calculate opportunity - cost for stocking shelves

For David, to stock 1 shelf (20 minutes), he gives up $\frac{20}{10}=2$ customers. For Danny, to stock 1 shelf (15 minutes), he gives up $\frac{15}{15}=1$ customer. Danny has a lower opportunity - cost in stocking shelves.

Answer:

David has a comparative advantage in processing customers but not in stocking shelves.