Table 3-3

-Refer to Table 3-3. Which of the following is correct?
A)Helen has a comparative advantage in dresses and Carolyn has a comparative advantage in quilts.
B)Helen has a comparative advantage in quilts and Carolyn has a comparative advantage in dresses.
C)Helen has a comparative advantage in neither good and Carolyn has a comparative advantage in both goods.
D)Helen has a comparative advantage in both goods and Carolyn has a comparative advantage in neither good.

Question

Table 3-3
 
-Refer to Table 3-3. Which of the following is correct?
A)Helen has a comparative advantage in dresses and Carolyn has a comparative advantage in quilts. 
B)Helen has a comparative advantage in quilts and Carolyn has a comparative advantage in dresses. 
C)Helen has a comparative advantage in neither good and Carolyn has a comparative advantage in both goods. 
D)Helen has a comparative advantage in both goods and Carolyn has a comparative advantage in neither good.

Quizplus · Accepted Answer

The table shows the number of dresses and quilts that Helen and Carolyn can produce in one hour. To determine comparative advantage, we need to compare the opportunity cost of each good between the two individuals.

For Helen, the opportunity cost of one quilt is 2/3 of a dress (she gives up 2 dresses to produce 3 quilts). 
For Carolyn, the opportunity cost of one quilt is 1 dress (she gives up 1 dress to produce 1 quilt).

Therefore, Carolyn has a comparative advantage in quilts (she has a lower opportunity cost) and Helen has a comparative advantage in dresses. The correct answer is B.

Table 3-3 -Refer to Table 3-3. Which of the Following Is Correct