Both Bill and Mary produce t-shirts and hats.If Bill's opportunity cost of 1 t-shirt is 4 hats and Mary's opportunity cost of 1 t-shirt is 3 hats,then
A) Bill has a comparative advantage in the production of t-shirts.
B) Mary has a comparative advantage in the production of t-shirts.
C) Mary has a comparative advantage in the production of hats.
D) Bill has a comparative advantage in the production of both t-shirts and hats.

Question

Quizplus · Accepted Answer

Mary has a lower opportunity cost of producing t-shirts compared to Bill (her opportunity cost is 3 hats while Bill's opportunity cost is 4 hats). This means that Mary has a comparative advantage in the production of t-shirts. Therefore, the correct answer is B.

Both Bill and Mary Produce T-Shirts and Hats