Table 3-37
-Refer to Table 3-37. Sarah and Charles are both potters and each can switch between the production of vases and mugs at a constant rate. The table shows the total number of vases or decorative mugs that each person can produce in a six-hour session of producing pottery. Sarah has an absolute advantage in
A)the production of vases and a comparative advantage in the production of vases.
B)the production of mugs and a comparative advantage in the production of mugs.
C)the production of neither good and a comparative advantage in the production of vases.
D)the production of both goods and a comparative advantage in the production of mugs.

Question

Table 3-37  ​
-​Refer to Table 3-37. Sarah and Charles are both potters and each can switch between the production of vases and mugs at a constant rate. The table shows the total number of vases or decorative mugs that each person can produce in a six-hour session of producing pottery. Sarah has an absolute advantage in
A)​the production of vases and a comparative advantage in the production of vases. 
B)​the production of mugs and a comparative advantage in the production of mugs. 
C)​the production of neither good and a comparative advantage in the production of vases. 
D)​the production of both goods and a comparative advantage in the production of mugs.

Quizplus · Accepted Answer

Sarah has an absolute advantage in both the production of vases and mugs since she can produce more of each than Charles in a given six-hour session. However, Sarah has a comparative advantage in the production of mugs since she has a lower opportunity cost (i.e. gives up fewer vases) to produce one mug compared to Charles. Therefore, Sarah should specialize in the production of mugs and Charles should specialize in the production of vases, leading to a more efficient use of their time and increased overall output of both goods.

Table 3-37 ​

Table 3-37