Comparative advantage, specialization and exchange
Terese and Patrick need to decide which one of them will take time off work to complete the rather urgent task of shearing llamas. Terese is pretty good with a pair of shears, she can shear the llamas in 30minutes. Patrick is somewhat slow, it takes him 5hours to shear the llamas. Terese earns 160per hour as a personal trainer, while Patrick earns 20per hour as a clerk.
Keeping in mind that either Terese or Patrick must take time off from work to shear the llamas, who has the lowest opportunity cost?
A) Terese
B) Tersese and Patrick face identical opportunity cost
c) Patrick
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