Figure 3-22
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier
-Refer to Figure 3-22.Which of the following statements is correct regarding comparative advantage?
A)Alice has a comparative advantage in the production of both lemonade and pizzas.
B)Betty has a comparative advantage in the production of both lemonade and pizzas.
C)Alice has a comparative advantage in the production of pizzas while Betty has a comparative advantage in the production of lemonade.
D)Alice has a comparative advantage in the production of lemonade while Betty has a comparative advantage in the production of pizzas.

Question

Figure 3-22
Alice and Betty's Production Possibilities in one 8-hour day.
Alice's Production Possibilities Frontier
Betty's Production Possibilities Frontier  
-Refer to Figure 3-22.Which of the following statements is correct regarding comparative advantage?
A)Alice has a comparative advantage in the production of both lemonade and pizzas. 
B)Betty has a comparative advantage in the production of both lemonade and pizzas. 
C)Alice has a comparative advantage in the production of pizzas while Betty has a comparative advantage in the production of lemonade. 
D)Alice has a comparative advantage in the production of lemonade while Betty has a comparative advantage in the production of pizzas.

Quizplus · Accepted Answer

Alice can produce 10 pizzas or 20 lemonades per hour, while Betty can produce 15 pizzas or 10 lemonades per hour. So, Alice has a comparative advantage in producing pizzas, and Betty has a comparative advantage in producing lemonades.

Figure 3-22 Alice and Betty's Production Possibilities in One 8-Hour Day