Because there are 10 people in my
family, we often combine our efforts to do chores and my younger brother can do
the chores much faster than my younger sister. Consider I bribe them with
chicken for finishing their chores. Also, assume that there are only two jobs: washing
dishes and cleaning rooms.
This table represents the time that
it takes for each of them to get the chores done.
My brother fought with my sister and
claims that he can finish both jobs faster than my sister, so he does not want
to work with her. In other words, he claims that he has an absolute advantage
in both. I want to prove to him
that it is more effective to work together using the concept of comparative
A comparative advantage the ability to produce goods or
services at a comparatively lower opportunity cost than others. To
calculate comparative advantage, we need to compare the opportunity cost of
each item being produced. The opportunity cost for each task for my brother and
sister is following:
Opportunity cost of
4 cleaning rooms
1/4 washing dishes
2 cleaning rooms
½ washing dishes
Based on the table above, my
brother has a lower opportunity cost of cleaning rooms than my sister, so he
has a comparative advantage in cleaning rooms. On the other hand, my sister has
a lower opportunity cost in washing dishes, so she has a comparative advantage
in washing dishes.
Once we find out which products we a
have a comparative advantage in, we can use specialization to make the most
effective outcome. In this case, my brother should specialize in cleaning rooms
and my sister can specialize in washing dishes. Then, let us compare that with
the result that could have been made if there was no specialization.
Consider they were given 4 hours to
complete the chores. If my brother decides to do everything by himself and uses
2 hours for each task, then he could wash 3 dishes and clean 12 rooms. On the
other hand, my sister could wash 2 dishes and clean 4 rooms. So, the total amount of works done is 5
washing dishes and cleaning 16 rooms.
However, if they share the work and use specialization,
My brother will only spend his time in cleaning rooms, so he
will clean 24 rooms.
At the same time, my sister will be washing 4 dishes.
So, the total amount of work done
is washing dishes 4 times and cleaning 24 rooms.
As you can see, they clean 8 more
rooms and 1 fewer dishes but did one fewer dishes. But, my brother’s
opportunity cost to do one more dishes is only 4 rooms, so they are both better
Therefore, we can make the
conclusion that my brother should work with my sister to be more productive.