The accompanying figures depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between making pizzas and making stromboli.Which statement about comparative advantage is true?
A)Jim has a comparative advantage in the production of stromboli because his opportunity cost is lower.
B)Jim has a comparative advantage in the production of stromboli because his opportunity cost is higher.
C)Jim has a comparative advantage in the production of pizzas because his opportunity cost is lower.
D)Jim has a comparative advantage in the production of pizzas because his opportunity cost is higher.
E)Jim has a comparative advantage in the production of both pizzas and stromboli.

Question

The accompanying figures depict the production possibilities frontiers (PPFs)for two people who can allocate the same amount of time between making pizzas and making stromboli.Which statement about comparative advantage is true? 
A)Jim has a comparative advantage in the production of stromboli because his opportunity cost is lower. 
B)Jim has a comparative advantage in the production of stromboli because his opportunity cost is higher. 
C)Jim has a comparative advantage in the production of pizzas because his opportunity cost is lower. 
D)Jim has a comparative advantage in the production of pizzas because his opportunity cost is higher. 
E)Jim has a comparative advantage in the production of both pizzas and stromboli.

Quizplus · Accepted Answer

Comparative advantage is defined as the ability to produce a good or service at a lower opportunity cost than someone else. In this case, Jim has a lower opportunity cost for producing stromboli than Emily (2 pizzas compared to 3 pizzas). Therefore, Jim has a comparative advantage in the production of stromboli.

The Accompanying Figures Depict the Production Possibilities Frontiers (PPFs)for Two