Suppose that in the time it takes for him to bake a cake,Bob can produce 5 pairs of jeans.In the time it takes for Joe to bake a cake,he can produce 8 pairs of jeans.In this example,who has the comparative advantage in baking a cake?
A) Joe
B) both Bob and Joe
C) Bob
D) neither Bob nor Joe

Question

Quizplus · Accepted Answer

Comparative advantage is determined by the opportunity cost of producing one good over another. In this case, Bob can produce 5 pairs of jeans in the same amount of time it takes him to bake a cake, while Joe can only produce 8 pairs of jeans. Therefore, Bob has a lower opportunity cost of baking a cake, and thus has the comparative advantage in baking a cake.

Suppose That in the Time It Takes for Him to Bake