Don can produce 10 pens or 20 pencils in one hour while Bob can produce 15 pens or 5 pencils in one hour. Which of the following statements is correct?
A) Bob has a comparative advantage over Don in the production of pencils
B) Bob has a comparative advantage over Don in the production of pens
C) Don has a comparative advantage over Bob in the production of pens
D) Bob and Don cannot gain from specialization and exchange.

Question

Quizplus · Accepted Answer

The Answer of Don can produce 10 pens or 20 pencils in one hour while Bob can produce 15 pens or 5 pencils in one hour. Which of the following statements is correct?
A) Bob has a comparative advantage over Don in the production of pencils
B) Bob has a comparative advantage over Don in the production of pens
C) Don has a comparative advantage over Bob in the production of pens
D) Bob and Don cannot gain from specialization and exchange.

Don Can Produce 10 Pens or 20 Pencils in One