Table 3-6
Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate.

-Refer to Table 3-6.Hilda has an absolute advantage in the production of
A) both goods and a comparative advantage in the production of quilts.
B) both goods and a comparative advantage in the production of dresses.
C) neither good and a comparative advantage in the production of quilts.
D) neither good and a comparative advantage in the production of dresses.

Question

Table 3-6
Assume that Hilda and Carlos can switch between producing quilts and producing dresses at a constant rate.
 
-Refer to Table 3-6.Hilda has an absolute advantage in the production of
A) both goods and a comparative advantage in the production of quilts. 
B) both goods and a comparative advantage in the production of dresses. 
C) neither good and a comparative advantage in the production of quilts. 
D) neither good and a comparative advantage in the production of dresses.

Quizplus · Accepted Answer

Hilda can produce a higher number of units per hour than Carlos for both quilts and dresses, indicating that she has an absolute advantage in the production of both goods. However, when calculating the opportunity cost, we can see that Hilda has a lower opportunity cost of producing quilts compared to dresses, whereas Carlos has a lower opportunity cost of producing dresses. This means that Hilda has a comparative advantage in the production of quilts, while Carlos has a comparative advantage in the production of dresses. Thus, the best choice is B, which states that Hilda has an absolute advantage in both goods and a comparative advantage in the production of dresses.

Table 3-6 Assume That Hilda and Carlos Can Switch Between Producing Quilts