John can make pizza at a lower opportunity cost than Allen, but Allen can make more pizzas per day than John. Therefore,
A) John has a comparative advantage in pizza.
B) John has an absolute advantage in pizza.
C) John cannot benefit from trade with Allen.
D) Allen has a comparative advantage in pizza.
E) Allen cannot benefit from trade with John.

Question

Quizplus · Accepted Answer

John has a lower opportunity cost of making pizza than Allen, which means he has a comparative advantage in making pizza. This means that John can produce pizza at a lower cost than Allen, and therefore would benefit from trading with him. Allen may be able to produce more pizzas per day, but this does not mean he has a comparative advantage in pizza production.

John Can Make Pizza at a Lower Opportunity Cost Than