Figure 3-16
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier
-Refer to Figure 3-16.Hosne has a comparative advantage in the production of
A)purses and Merve has a comparative advantage in the production of wallets.
B)wallets and Merve has a comparative advantage in the production of purses.
C)both goods and Merve has a comparative advantage in the production of neither good.
D)neither good and Merve has a comparative advantage in the production of both goods.

Question

Figure 3-16
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier  
-Refer to Figure 3-16.Hosne has a comparative advantage in the production of
A)purses and Merve has a comparative advantage in the production of wallets. 
B)wallets and Merve has a comparative advantage in the production of purses. 
C)both goods and Merve has a comparative advantage in the production of neither good. 
D)neither good and Merve has a comparative advantage in the production of both goods.

Quizplus · Accepted Answer

Comparative advantage is determined by who can produce a good at a lower opportunity cost. The statement suggests that Hosne has a comparative advantage in purses, while Merve has it in wallets.

Figure 3-16 Hosne's Production Possibilities Frontier