Multiple Choice
In one hour John can produce 20 loaves of bread or 16 cakes. In one hour Phyllis can produce 30 loaves of bread or 15 cakes. Which of the following statements is true?
A) John has an absolute advantage in both goods.
B) Phyllis has an absolute advantage in both goods.
C) Phyllis has a comparative advantage in producing both cakes and bread.
D) John has a comparative advantage in producing cakes.
E) Phyllis has a comparative advantage in producing bread.
Correct Answer:
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