Respuesta :
Answer:
Option (a) is correct.
Explanation:
Mike can make 4 tables or 20 chairs:
Opportunity cost of producing 1 chair = 4 ÷ 20
= 0.2
Sandy can make 6 tables or 18 chairs:
Opportunity cost of producing 1 chair = 6 ÷ 18
= 0.33
Therefore,
Mike has the comparative advantage in producing chair because he has the lower opportunity cost as compared to Sandy.
The opportunity cost of 1 chair is 1/5 table for Mike and 1/3 table for Sandy.
Definition of opportunity cost
Opportunity cost of the next best option forgone when one alternative is chosen over other alternatives. In order to determine the opportunity cost of making chairs, divide the number of tables made for each person by the number of chairs.
Mike's opportunity cost in making one chair = 4/20 = 1/5
Sandy's opportunity cost in making one chair = 6/18 = 1 / 3
To learn more about opportunity cost, please check: brainly.com/question/13036997
