Given that Sandy can produce 10 economics reports or 2 sales calls and Tim can produce 2 economics reports or 1 sales call,which of the following is FALSE?
A)Sandy has a comparative advantage in sales calls.
B)Tim has a comparative advantage in sales calls.
C)Sandy has a comparative advantage in economics reports.
D)Sandy has an absolute advantage in both economics reports and sales calls.

Question

Quizplus · Accepted Answer

Sandy has a comparative advantage in economics reports, not sales calls, because she gives up fewer economics reports to produce a sales call compared to Tim. Comparative advantage is determined by who has the lower opportunity cost in production, not by who can produce more overall.

Given That Sandy Can Produce 10 Economics Reports or 2