The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow.

-Which statement best describes the absolute advantage shown in the figures?
A) Pam has an absolute advantage in the production of both.
B) Jim has an absolute advantage in the production of both.
C) Jim has an absolute advantage in the production of pizzas, and Pam has an absolute advantage in the production of stromboli.
D) Pam has an absolute advantage in the production of pizzas, and Jim has an absolute advantage in the production of stromboli.
E) They both have an absolute advantage in the production of stromboli.

Question

The figures below depict the production possibilities frontiers (PPFs) for two people who can allocate the same amount of time between making pizzas and making stromboli. Refer to these figures to answer the questions that follow.
 
-Which statement best describes the absolute advantage shown in the figures?
A) Pam has an absolute advantage in the production of both. 
B) Jim has an absolute advantage in the production of both. 
C) Jim has an absolute advantage in the production of pizzas, and Pam has an absolute advantage in the production of stromboli. 
D) Pam has an absolute advantage in the production of pizzas, and Jim has an absolute advantage in the production of stromboli. 
E) They both have an absolute advantage in the production of stromboli.

Quizplus · Accepted Answer

Absolute advantage refers to the ability to produce more of a particular good with the same amount of resources as someone else. Based on the figures, Jim can produce more of both pizzas and stromboli than Pam with the same amount of resources. However, Pam has a lower opportunity cost of producing pizzas, while Jim has a lower opportunity cost of producing stromboli. Therefore, Pam has an absolute advantage in the production of pizzas, and Jim has an absolute advantage in the production of stromboli.

The Figures Below Depict the Production Possibilities Frontiers (PPFs) for Two