Eric and Deborah are partners at a law firm. They are trying to determine which of them has a comparative advantage in typing the 25 pages required for a sales pitch to a prospective client. Eric can type 20 pages per hour. For other activities, he can bill clients $500 per hour. Eric's opportunity cost of typing pages isper page.
Deborah's opportunity cost of typing pages is 25% lower than Eric's. However, as the senior partner, her billing rate is 20% higher. Based on all of these facts, has a comparative advantage in typing pages.