Table 9-5
Madison and Austin own Cafe Ole'. Table 9-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
-Refer to Table 9-5. Select the statement that accurately interprets the data in the table.
A) Madison has a comparative advantage in making empanadas.
B) Austin has an absolute advantage in making tacos.
C) Austin has a comparative advantage in making empanadas.
D) Austin has a comparative advantage in making empanadas and making tacos.

Question

Table 9-5
  Madison and Austin own Cafe Ole'. Table 9-5 lists the number of empanadas and tacos Madison and Austin can each make in one hour.
-Refer to Table 9-5. Select the statement that accurately interprets the data in the table.
A) Madison has a comparative advantage in making empanadas. 
B) Austin has an absolute advantage in making tacos. 
C) Austin has a comparative advantage in making empanadas. 
D) Austin has a comparative advantage in making empanadas and making tacos.

Quizplus · Accepted Answer

Comparative advantage is determined by who has the lower opportunity cost for producing a good. The statement suggests Austin has a comparative advantage in making empanadas, implying Austin's opportunity cost for empanadas is lower than Madison's.

Table 9-5 Madison and Austin Own Cafe Ole'. Table 9-5