Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. Which of the following statements is correct?
A)Dan has the comparative advantage in smoothies, but Tracy has the absolute advantage in smoothies.
B)Dan has the comparative and absolute advantage in sandwiches.
C)Dan has the comparative and absolute advantage in smoothies.
D)Dan has the comparative advantage in sandwiches, but Tracy has the absolute advantage in sandwiches.

Question

Quizplus · Accepted Answer

For Dan, in the time it takes him to make a sandwich, he could make 1/3 of a smoothie, and in the time it takes him to make a smoothie, he could make 3 sandwiches. For Tracy, in the time it takes her to make a sandwich, she could make 1/2 of a smoothie, and in the time it takes her to make a smoothie she could make 2 sandwiches. So, Dan has the comparative advantage in sandwiches (because 1/3 < 1/2)and Tracy has the comparative advantage in smoothies (because 2 < 3). Also, because Dan can make a sandwich more quickly than Tracy, he has the absolute advantage in sandwiches, and because Tracy can make a smoothie more quickly than Dan, she has the absolute advantage in smoothies.

Suppose It Takes Dan 5 Minutes to Make a Sandwich