Graph 3-2 These figures illustrate the production possibilities available to Amy and Jim with 8 hours of labour.
-According to Graph 3-2:
A)Amy has an absolute advantage in both goods, and Jim has a comparative advantage in coffee
B)Amy has an absolute advantage in both goods, and Jim has a comparative advantage in doughnuts
C)Amy has an absolute advantage in coffee, and Jim has a comparative advantage in doughnuts
D)Amy has an absolute advantage in doughnuts, and Jim has a comparative advantage in coffee

Question

Graph 3-2  These figures illustrate the production possibilities available to Amy and Jim with 8 hours of labour.
-According to Graph 3-2:
A)Amy has an absolute advantage in both goods, and Jim has a comparative advantage in coffee 
B)Amy has an absolute advantage in both goods, and Jim has a comparative advantage in doughnuts 
C)Amy has an absolute advantage in coffee, and Jim has a comparative advantage in doughnuts 
D)Amy has an absolute advantage in doughnuts, and Jim has a comparative advantage in coffee

Quizplus · Accepted Answer

Amy having an absolute advantage in both goods means she can produce more of both goods with the same resources compared to Jim. Jim having a comparative advantage in doughnuts means he has a lower opportunity cost in producing doughnuts compared to Amy.

Graph 3-2 These Figures Illustrate the Production Possibilities Available