If Wendy can produce more of all goods than Tommy in an hour,then
A)Tommy has an absolute advantage in all goods.
B)Wendy does not need to trade with Tommy in order to achieve the gains from trade.
C)Wendy has an absolute advantage in all goods.
D)Only Tommy but not Wendy can benefit from trade between the two of them.
E)Wendy has a comparative advantage in all goods.

Question

Quizplus · Accepted Answer

If Wendy can produce more of all goods than Tommy in an hour, then she has an absolute advantage in all goods. This means she can produce a greater quantity of all goods in the same amount of time as Tommy. Therefore, Wendy could produce all goods by herself more efficiently and effectively than Tommy.

If Wendy Can Produce More of All Goods Than Tommy