Should Eli Manning Mow Should Eli Manning Mow His Own Lawn?His Own Lawn?

A quick lesson in comparative A quick lesson in comparative advantageadvantage

Eli Manning isn’t Eli Manning isn’t just a great just a great quarterback, he is quarterback, he is a great athlete…he a great athlete…he can probably run can probably run faster, lift more, faster, lift more, and work faster and work faster than most people. than most people.

In fact, he can In fact, he can probably mow his probably mow his lawn faster than lawn faster than anybody else. But anybody else. But should he?should he?

Let’s say that Eli Let’s say that Eli can mow his lawn can mow his lawn in 2 hours. In that in 2 hours. In that same time, he same time, he could earn could earn $100,000 filming a $100,000 filming a commercial for commercial for Gatorade.Gatorade.

In contrast, Bubba Gump, the kid In contrast, Bubba Gump, the kid next door can mow Eli’s lawn in 4 next door can mow Eli’s lawn in 4 hours. In that same 4 hours he could hours. In that same 4 hours he could work at McDonald’s and earn $28.work at McDonald’s and earn $28.

In this case, Eli’s opportunity cost is In this case, Eli’s opportunity cost is $100,000 and Bubba’s is $28.$100,000 and Bubba’s is $28.

Eli has an absolute advantage in Eli has an absolute advantage in mowing lawns because he can do the mowing lawns because he can do the work in less time.work in less time.

Bubba has the comparative Bubba has the comparative advantage because he has the advantage because he has the lower lower opportunity cost.opportunity cost.

The gains in trade are The gains in trade are tremendous. Eli tremendous. Eli should make the should make the commercial and hire commercial and hire Bubba to mow his Bubba to mow his lawn. As long as he lawn. As long as he pays Bubba more pays Bubba more than $28 and less than $28 and less than $100,000, both than $100,000, both of them are better off.of them are better off.