Greg Mankiw’s introductory econ textbook has a good explanation of a similar point:
LeBron James is a great athlete. One of the best basketball players of all time, he can jump higher and shoot better than most other people. Most likely, he is talented at other physical activities as well. For example, let’s imagine that LeBron can mow his lawn faster than anyone else. But just because he can mow his lawn fast, does this mean he should?
Let’s say that LeBron can mow his lawn in 2 hours. In those same 2 hours, he could film a television commercial and earn $30,000. By contrast, Kaitlyn, the girl next door, can mow LeBron’s lawn in 4 hours. In those same 4 hours, Kaitlyn could work at McDonald’s and earn $50.
In this example, LeBron has an absolute advantage in mowing lawns because he can do the work with a lower input of time. Yet because LeBron’s opportunity cost of mowing the lawn is $30,000 and Kaitlyn’s opportunity cost is only $50, Kaitlyn has a comparative advantage in mowing lawns.
(From Mankiw, G., Principles of Economics, p. 54, 9th edition)
Suppose we modify this example, such that:
LeBron was the best in the world at mowing lawns.
LeBron doesn’t make more money from television commercials than any other celebrity in the world.
Even though LeBron is better at mowing lawns than at television commercials, and also ranks higher among those who mow lawns than among those who film television commercials, he should film the commercial.
Greg Mankiw’s introductory econ textbook has a good explanation of a similar point:
LeBron James is a great athlete. One of the best basketball players of all time, he can jump higher and shoot better than most other people. Most likely, he is talented at other physical activities as well. For example, let’s imagine that LeBron can mow his lawn faster than anyone else. But just because he can mow his lawn fast, does this mean he should?
Let’s say that LeBron can mow his lawn in 2 hours. In those same 2 hours, he could film a television commercial and earn $30,000. By contrast, Kaitlyn, the girl next door, can mow LeBron’s lawn in 4 hours. In those same 4 hours, Kaitlyn could work at McDonald’s and earn $50.
In this example, LeBron has an absolute advantage in mowing lawns because he can do the work with a lower input of time. Yet because LeBron’s opportunity cost of mowing the lawn is $30,000 and Kaitlyn’s opportunity cost is only $50, Kaitlyn has a comparative advantage in mowing lawns.
(From Mankiw, G., Principles of Economics, p. 54, 9th edition)
Suppose we modify this example, such that:
LeBron was the best in the world at mowing lawns.
LeBron doesn’t make more money from television commercials than any other celebrity in the world.
Even though LeBron is better at mowing lawns than at television commercials, and also ranks higher among those who mow lawns than among those who film television commercials, he should film the commercial.