Absolutely! Let’s consider a simple example involving two individuals, Alice and Bob, who are both skilled in cooking and cleaning.
Alice can cook a meal in 30 minutes and can clean the house in 60 minutes. Bob, on the other hand, can cook a meal in 20 minutes and can clean the house in 40 minutes.
Now, let’s look at their absolute advantages. Bob has an absolute advantage in cooking because he can prepare a meal faster than Alice (20 minutes compared to 30 minutes). Similarly, Bob also has an absolute advantage in cleaning since he takes 40 minutes while Alice takes 60 minutes.
However, let’s calculate their comparative advantages by determining their opportunity costs. For Alice, the opportunity cost of cooking one meal is 1.5 hours of cleaning (60 minutes for cleaning divided by 30 minutes for cooking). For Bob, the opportunity cost of cooking one meal is 1 hour of cleaning (40 minutes for cleaning divided by 20 minutes for cooking).
In this case, Alice actually has a comparative advantage in cleaning because her opportunity cost of cleaning is lower (0.67 meals per hour if she dedicates all her time to cleaning, versus Bob’s 1 meal per hour). Therefore, even though Bob has an absolute advantage in both tasks, Alice’s lower opportunity cost gives her the comparative advantage in cleaning.
This example illustrates how one person can be better at both tasks (absolute advantage), yet another person can still hold a comparative advantage in one of those tasks based on their opportunity costs.