In one hour John can produce 20 loaves of bread or 8 cakes. In one hour Phyllis can produce 30 loaves of bread or 15 cakes. Which of the following statements is true?
A) Phyllis has an absolute advantage in both goods.
B) Phyllis has a comparative advantage in producing both cakes and bread.
C) John has an absolute advantage in both goods.
D) John has a comparative advantage in producing cakes.
E) Phyllis has a comparative advantage in producing bread.

Question

Quizplus · Accepted Answer

Phyllis can produce more of both goods (30 loaves of bread and 15 cakes) in one hour compared to John (20 loaves of bread and 8 cakes), indicating Phyllis has an absolute advantage in producing both goods.

In One Hour John Can Produce 20 Loaves of Bread