An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the most of each good that can be produced each day if each worker fully specializes according to his/her comparative advantage?
A)4 computers and 12 shirts.
B)5 computers and 14 shirts
C)6 computers and 16 shirts
D)8 computers and 22 shirts

Question

Quizplus · Accepted Answer

Ricardo has a comparative advantage in computers, and Paula has a comparative advantage in shirts. If Ricardo specializes in producing computers, then he can produce 6 per day, and if Paula specializes in producing shirts, then she can produce 16 per day.

An Economy Has Two Workers, Paula and Ricardo