I presume that the numbers mean some sort of production in a given period (e.g., "Ben-cones 8" means the number of cones Ben can produce in a time period)
So then, the opportunity cost for Ben to produce 8 cones is 2 ice cream, or 4 cones=1 ice cream. For jerry 1.5 cones=1 ice cream. Ben has a comparative advantage in cones, jerry has a compartitive advantage in ice cream.
In one period, Ben could produce 8 cones to Jerry's 6, Ben has an absolute advantage in producine cones.
I picked the answer C for both questions. I still am not sure?
Ben-cones 8
Ben-ice cream 2
Jerry-Cones 6
Jerry-Ice Cream 4
According to the tables, Ben as a comparative advantage in:
A) ice cream, and Jerry has an absolute advantage in both goods
B) cones, and Jerry has an absolute advantage in ice cream
C) ice cream, and Jerry has an absolute advantage in neither good
D) ice cream, and Jerry has an absolute advantage in cones.
According to the tables, Ben has an absolute advantage in:
A) cones, and Jerry has a comparative advantage in ice cream
B) both goods, and Jerry has a comparative advantage in cones
C) ice cream, and Jerry has a comparative advantage in cones
D) neither good, nor Jerry has a comparative advantage in ice cream.
1 answer
1 answer