Refer to the table above. ______ has the comparative advantage in making pies and ______ the comparative advantage in making cakes. $$\begin{array} { | l | c | c | }
\hline & \begin{array} { c }
\text { Time to } \
\text { Make a Pie }
\end{array} & \begin{array} { c }
\text { Time to } \
\text { Make a Cake }
\end{array} \
\hline \text { Martha } & 60 \text { minutes } & 80 \text { minutes } \
\hline \text { Julia } & 50 \text { minutes } & 60 \text { minutes } \
\hline
\end{array}$$
A)Martha; Martha
B)Julia; Julia
C)Martha; Julia
D)Julia; Martha

Question

Refer to the table above. ______ has the comparative advantage in making pies and ______ the comparative advantage in making cakes. $$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Time to } \
\text { Make a Pie }
\end{array} & \begin{array} { c } 
\text { Time to } \
\text { Make a Cake }
\end{array} \
\hline \text { Martha } & 60 \text { minutes } & 80 \text { minutes } \
\hline \text { Julia } & 50 \text { minutes } & 60 \text { minutes } \
\hline
\end{array}$$
A)Martha; Martha
B)Julia; Julia
C)Martha; Julia
D)Julia; Martha

Quizplus · Accepted Answer

To determine comparative advantage, we look at the opportunity cost of producing each item. Martha's opportunity cost of making a pie is 80/60 = 4/3 cakes, while Julia's opportunity cost of making a pie is 60/50 = 6/5 cakes. Therefore, Julia has a lower opportunity cost of making pies and thus the comparative advantage in making pies. Conversely, Martha has a higher opportunity cost of making pies and a lower opportunity cost of making cakes, giving her the comparative advantage in making cakes. Therefore, the correct answer is C, as Martha has the comparative advantage in making cakes and Julia has the comparative advantage in making pies.

Refer to the Table Above A)Martha; Martha B)Julia; Julia C)Martha; Julia D)Julia; Martha

Refer to the Table Above A)Martha; Martha
B)Julia; Julia
C)Martha; Julia
D)Julia; Martha