Eileen and Clancy need to decide which one of them will take time off from work to complete the rather urgent task of digging postholes for their new fence. Eileen is pretty good with a post auger; she can dig the holes in 30 minutes. Clancy is somewhat slow; it takes him 6 hours to dig the holes. Eileen earns $180 per hour as a lawyer, while Clancy earns $20 per hour as a barber. Keeping in mind that either Eileen or Clancy must take time off from work to dig the holes, who has the lower opportunity cost of completing the task?

Clancy

Eileen and Clancy face identical opportunity costs

Eileen
4. Fill in the Blanks:

1st blank: $0.05 or $5.00 or $20.00 or $.20

2nd blank: Eric or Alison

Eric and Alison are partners at a management consulting firm. They are trying to determine which of them has a comparative advantage in creating the 100 slides required for a sales pitch to a prospective client.

Eric can create 25 slides per hour. For other activities, he can bill clients $500 per hour. Eric's opportunity cost of creating slides is per slide.

Alison's opportunity cost of creating slides is 25% higher than Eric's. However, as the junior partner, her billing rate is 20% lower. Based on all of these facts, has a comparative advantage in creating slides.