-Refer to Table 3-3. What does each of the two producers have a comparative advantage in?
A) Maria has a comparative advantage in coats, and Courtney has a comparative advantage in sweaters.
B) Maria has a comparative advantage in sweaters, and Courtney has a comparative advantage in coats.
C) Maria has a comparative advantage in neither good, and Courtney has a comparative advantage in both goods.
D) Maria has a comparative advantage in both goods, and Courtney has a comparative advantage in neither good.

Question

-Refer to Table 3-3. What does each of the two producers have a comparative advantage in?
A) Maria has a comparative advantage in coats, and Courtney has a comparative advantage in sweaters. 
B) Maria has a comparative advantage in sweaters, and Courtney has a comparative advantage in coats. 
C) Maria has a comparative advantage in neither good, and Courtney has a comparative advantage in both goods. 
D) Maria has a comparative advantage in both goods, and Courtney has a comparative advantage in neither good.

Quizplus · Accepted Answer

Comparative advantage is determined by who can produce a good at a lower opportunity cost. If Maria has a comparative advantage in coats, it means she sacrifices less of other goods to produce coats compared to Courtney. Conversely, if Courtney has a comparative advantage in sweaters, she sacrifices less of other goods to produce sweaters compared to Maria.