On Comparative Advantage
...Suppose we have two people- Chuck Norris and Jimmy Trivette. (In case
you’re curious, Jimmy Trivette is the name of Norris’ sidekick on
Walker, Texas Ranger.) These two people perform two tasks in a simple
economy- kicking ass and taking names.
(Clearly I am having too much
fun with this.)
Chuck Norris, being Chuck Norris, is obviously “better”
at both kicking ass and taking names- in other words, Chuck can both
kick more ass and take more names per hour than Jimmy can. In economic
terms, this means that Chuck has an absolute advantage in both kicking
ass and taking names.
But can Chuck have a comparative advantage in both activities? Let’s
say that Chuck can either kick 4 asses or take 4 names in an hour, and
Jimmy can either kick 1 ass or take 3 names in an hour....
