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Fact 2.3.2
Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in a hour.
-Given Fact 2.3.2, what would be the total output of X and Y in an eight- hour day if Agnes and Brenda each specialized in producing the good in which they have a comparative advantage?
A)8 units of X and 16 units of Y
B)24 units of X and 40 units of Y
C)3 units of X and 5 units of Y
D)8 units of X and 32 units of Y
E)16 units of X and 8 units of Y

Question

Quizplus · Accepted Answer

Agnes has a comparative advantage in producing X because she gives up fewer units of Y to produce X compared to Brenda. Brenda has a comparative advantage in producing Y because she can produce more units of Y per unit of X compared to Agnes. Therefore, Agnes should specialize in producing X and Brenda in Y. In an eight-hour day, Agnes can produce 8 units of X (1 unit per hour * 8 hours), and Brenda can produce 32 units of Y (4 units per hour * 8 hours).

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