Consider two individuals, Ozzy and Sharon, who produce toy boats and yoyos. Ozzy's and Sharon's hourly productivity are as follows:
Yoyos /hour Toy boats /hour
Ozzy 12 4
Sharon 10 5
Who has the absolute advantage or comparative advantage in the production of yoyos or boats?
Sharon has the absolute advantage in boats and Ozzy has the absolute advantage in yoyos. Sharon also has the comparative advantage in boats while Ozzy has it in yoyos, because Sharon's opportunity cost of producing one boat per hour is 2 yoyos, and Ozzy's opportunity cost of producing one boat per hour is 3 yoyos.
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