Suppose Jim and Tom can both produce two goods: baseball bats and hockey sticks.Which of the following is not possible?
A)Jim has an absolute advantage in the production of baseball bats and in the production of hockey sticks.
B)Jim has an absolute advantage in the production of baseball bats and a comparative advantage in the production of hockey sticks.
C)Jim has an absolute advantage in the production of hockey sticks and a comparative advantage in the production of baseball bats.
D)Jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks.

Question

Quizplus · Accepted Answer

Comparative advantage means having a lower opportunity cost in producing a good compared to another producer. It's not possible for Jim to have a comparative advantage in both goods simultaneously, as comparative advantage is relative and depends on the opportunity costs of both producers.

Suppose Jim and Tom Can Both Produce Two Goods: Baseball