If Heather can sell paper at a lower opportunity cost than Eitan can,then ________ has a(n)________ advantage in paper sales.
A) Heather; absolute
B) Eitan; absolute
C) Heather; positive
D) Heather; comparative
E) Eitan; comparative

Question

Quizplus · Accepted Answer

The question is asking about comparative advantage which is the ability to produce a good or service at a lower opportunity cost. Therefore, if Heather can sell paper at a lower opportunity cost than Eitan, she has a comparative advantage in paper sales. The answer is not A or B because absolute advantage refers to the ability to produce more of a good or service in a given time period with a given amount of resources. The answer is not C or E because positive advantage is not a commonly used term in economics.

If Heather Can Sell Paper at a Lower Opportunity Cost