Use the table below to answer the following questions.
Table 2.4.2
Production for one week by Sheila and Bruce

-Given the information in Table 2.4.2, which one of the following is true?
A)Sheila has a comparative advantage in good X.
B)Bruce has a comparative advantage in good X.
C)The opportunity cost to Bruce of an additional unit of X is 0.4 units of Y.
D)A and B
E)B and C

Question

Use the table below to answer the following questions.
Table 2.4.2
Production for one week by Sheila and Bruce
 
-Given the information in Table 2.4.2, which one of the following is true?
A)Sheila has a comparative advantage in good X. 
B)Bruce has a comparative advantage in good X. 
C)The opportunity cost to Bruce of an additional unit of X is 0.4 units of Y. 
D)A and B 
E)B and C

Quizplus · Accepted Answer

To determine comparative advantage, we need to calculate the opportunity cost of each good for each producer. 
Opportunity cost of 1 unit of X for Sheila = 0.6 units of Y (200 Y/ 120 X)
Opportunity cost of 1 unit of X for Bruce = 0.4 units of Y (120 Y/ 300 X)
Therefore, Bruce has a lower opportunity cost of producing X and hence a comparative advantage in producing X. 
Thus, option B is incorrect.
Option A is also incorrect as it is the opposite of what we just determined. 
Option C is correct as calculated above. Hence, options B and C are correct together.

Use the Table Below to Answer the Following Questions