Use the following scenario to answer the questions that follow.
Amy can produce either 5,000 pounds of cheese or 20 houses per year. Jim can produce either 5,000 pounds of cheese or 10 houses per year.
-If both Amy and Jim produce the good for which each has a comparative advantage,total output of this economy will be:

Question

Quizplus · Accepted Answer

Amy has a comparative advantage in producing houses (20 houses vs. Jim's 10), and Jim has a comparative advantage in producing cheese (5,000 pounds of cheese vs. Amy's opportunity cost of 20 houses). Therefore, Amy should produce 20 houses, and Jim should produce 5,000 pounds of cheese.

Use the Following Scenario to Answer the Questions That Follow