Yolanda can produce 2 dresses or 4 shirts in 8 hours of work,while Sandra can produce 3 dresses or 7 shirts in the same amount of time.Yolanda has a(n):
A) absolute advantage in producing dresses and shirts,and a comparative advantage in producing dresses,while Sandra has a comparative advantage in producing shirts.
B) comparative advantage in producing shirts,while Sandra has an absolute advantage in producing dresses and shirts,and a comparative advantage in producing dresses.
C) comparative advantage in producing dresses,while Sandra has an absolute advantage in producing dresses and shirts,and a comparative advantage in producing shirts.
D) absolute advantage in producing dresses and shirts,and a comparative advantage in producing shirts,while Sandra has a comparative advantage in producing dresses.
E) absolute advantage and a comparative advantage in producing dresses and shirts.

Question

Quizplus · Accepted Answer

Yolanda has a comparative advantage in producing dresses because she can produce 2 dresses in the same amount of time that Sandra can produce 3 dresses. On the other hand, Sandra has an absolute advantage in producing dresses and shirts because she can produce more of both items in the same amount of time than Yolanda. Sandra also has a comparative advantage in producing shirts because she can produce 7 shirts in the same amount of time that Yolanda can produce only 4 shirts. Therefore, the best choice is C as it accurately describes the scenario.

Yolanda Can Produce 2 Dresses or 4 Shirts in 8