Steve and Ginny 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.
Steve can create 25 slides per hour. For other activities, he can bill clients $500 per hour. Steve's opportunity cost of creating slides is per slide.
Ginny's opportunity cost of creating slides is 25% higher than Steve'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.