To determine who has the comparative advantage, we need to analyze the opportunity cost for both Elizabeth and Benjamin when they make pies versus cakes.
For Elizabeth:
- In one hour, she can make 3 pies or 6 cakes. Therefore:
- The opportunity cost of making 1 pie = 6 cakes / 3 pies = 2 cakes
- The opportunity cost of making 1 cake = 3 pies / 6 cakes = 0.5 pies
For Benjamin:
- In one hour, he can make 2 pies or 8 cakes. Therefore:
- The opportunity cost of making 1 pie = 8 cakes / 2 pies = 4 cakes
- The opportunity cost of making 1 cake = 2 pies / 8 cakes = 0.25 pies
Now we can summarize:
- Elizabeth's opportunity cost for pies: 2 cakes per pie
- Benjamin's opportunity cost for pies: 4 cakes per pie
Since Elizabeth has a lower opportunity cost for making pies than Benjamin (2 cakes vs. 4 cakes), she has the comparative advantage in baking pies.
On the other hand:
- Benjamin’s opportunity cost for cakes: 0.25 pies per cake
- Elizabeth's opportunity cost for cakes: 0.5 pies per cake
Since Benjamin has a lower opportunity cost for making cakes than Elizabeth (0.25 pies vs. 0.5 pies), he has the comparative advantage in baking cakes.
In conclusion:
- Elizabeth should specialize in making pies.
- Benjamin should specialize in baking cakes.
Given the options provided, the correct answer is: Elizabeth should specialize in making pies.