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.

-Based on the figures,which statement about comparative advantage is true?
A) Jim has a comparative advantage in the production of stromboli because his opportunity cost is lower.
B) Jim has a comparative advantage in the production of stromboli because his opportunity cost is higher.
C) Jim has a comparative advantage in the production of pizzas because his opportunity cost is lower.
D) Jim has a comparative advantage in the production of pizzas because his opportunity cost is higher.
E) Jim has a comparative advantage in the production of both pizzas and 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.
 
-Based on the figures,which statement about comparative advantage is true?
A) Jim has a comparative advantage in the production of stromboli because his opportunity cost is lower. 
B) Jim has a comparative advantage in the production of stromboli because his opportunity cost is higher. 
C) Jim has a comparative advantage in the production of pizzas because his opportunity cost is lower. 
D) Jim has a comparative advantage in the production of pizzas because his opportunity cost is higher. 
E) Jim has a comparative advantage in the production of both pizzas and stromboli.

Quizplus · Accepted Answer

Comparative advantage is determined by who has the lower opportunity cost in producing a good. If Jim's opportunity cost for producing stromboli is lower than others, he has a comparative advantage in stromboli.

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