Table 2.5

Table 2.5 shows the output per week of two jewelers, Serena and Haley.They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.5.Which of the following statements is true?
A)Haley has an absolute advantage in making both products.
B)Serena has an absolute advantage in making both products.
C)Haley has an absolute advantage in making bracelets and Serena in making necklaces.
D)Haley has an absolute advantage in making necklaces and Serena in making bracelets.

Question

Table 2.5

Table 2.5 shows the output per week of two jewelers, Serena and Haley.They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.5.Which of the following statements is true?
A)Haley has an absolute advantage in making both products. 
B)Serena has an absolute advantage in making both products. 
C)Haley has an absolute advantage in making bracelets and Serena in making necklaces. 
D)Haley has an absolute advantage in making necklaces and Serena in making bracelets.

Quizplus · Accepted Answer

Absolute advantage refers to the ability to produce a good or service using fewer resources than another producer. Looking at the table, we see that Haley can produce more bracelets and necklaces in a week than Serena. Therefore, Haley has an absolute advantage in making both products. However, Serena has a lower opportunity cost of making necklaces than bracelets compared to Haley. This means that for every unit of necklaces that Serena produces, she gives up fewer bracelets than Haley. Therefore, Serena has an absolute advantage in making necklaces, while Haley has an absolute advantage in making bracelets. Thus, the correct choice is C.

Table 2.5 Table 2.5 Shows the Output Per Week of Two