Answered

Use the table below to place the companies in order of greatest comparative advantage to least comparative advantage in producing small tubes of toothpaste.

| Rank | Company | Output (200 per hour) | Output (250 per hour) |
|------|---------|-----------------------|-----------------------|
| 3 | Freshl | 200 per hour | 250 per hour |
| 4 | Mmmint | 150 per hour | 150 per hour |

A. 2,1,3,4
B. 1,2,3,4
C. 4,3,1,2
D. 2,1,4,3



Answer :

GinnyAnswer
To solve this problem, we'll need to analyze the provided data on production rates for the two companies, Freshl and Mmmint, and determine which company has the greater comparative advantage in producing small tubes of toothpaste.

Here’s the step-by-step solution:

1. Understand the Production Rates:
- Freshl produces 200 and 250 small tubes of toothpaste per hour for two different activities.
- Mmmint produces 150 small tubes of toothpaste per hour for two different activities.

2. Calculate the Comparative Advantage:
- Freshl’s lowest production rate for small tubes of toothpaste is 200 per hour.
- Mmmint’s lowest production rate for small tubes of toothpaste is 150 per hour.

3. To compare and determine the company with the greatest comparative advantage, we look at the lowest production rate because comparative advantage is about the opportunity cost of not producing other goods.

4. Companies sorted by comparative advantage (from greatest to least):
- A higher minimum output indicates a greater comparative advantage in this context.
- Freshl has a lowest production rate of 200 per hour which is greater than Mmmint's 150 per hour. Therefore, Freshl has a greater comparative advantage compared to Mmmint.

5. Order the Companies:
- This analysis shows that Freshl should come first, followed by Mmmint.

Given these orders, we translate them to the provided numerical identifiers:
- Freshl is designated by number 3.
- Mmmint is designated by number 4.

Thus, the correct sequence is 3, 4.

The correct choice from the given options is:
[tex]\[ \boxed{3} \][/tex]

Other Questions