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Fact 2.3.2
Agnes can produce either 1 unit of X or 1 unit of Y in an hour, while Brenda can produce either 2 units of X or 4 units of Y in a hour.
-Refer to Fact 2.3.2.Which one of the following statements is true?
A)Brenda has a comparative advantage in the production of X.
B)Agnes will not gain from trade.
C)Brenda will not gain from trade.
D)Brenda has an absolute advantage over Agnes in the production of both goods.
E)Agnes has a comparative advantage in the production of Y.

Question

Quizplus · Accepted Answer

Brenda has an absolute advantage in both goods because she can produce more of each good per hour than Agnes.

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