If Luke can bake bread at a lower opportunity cost than Jason,and Jason can produce paintings at a lower opportunity cost than Luke,it follows that
A) Luke has a comparative advantage in paintings and Jason has a comparative advantage in baking bread.
B) Both Luke and Jason have a comparative advantage in baking bread.
C) Both Luke and Jason have a comparative disadvantage in producing paintings.
D) Luke has a comparative advantage in baking bread and Jason has a comparative advantage in producing paintings.
E) There is not enough information to answer the question.

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than another individual, firm or country. 
According to the information given, Luke's opportunity cost of baking bread is lower than Jason's, which means Luke has a comparative advantage in baking bread. Similarly, Jason's opportunity cost of producing paintings is lower than Luke's, which means Jason has a comparative advantage in producing paintings. Therefore, Luke has a comparative advantage in bread and Jason has a comparative advantage in paintings. Therefore, the correct choice is D.

If Luke Can Bake Bread at a Lower Opportunity Cost