Figure 3-4
-Refer to Figure 3-4. What does each of the two producers have a comparative or absolute advantage in?
A) Ben has a comparative advantage in wine, and Jerry has an absolute advantage in both goods.
B) Ben has a comparative advantage in beer, and Jerry has an absolute advantage in both goods.
C) Ben has a comparative advantage in beer, and Jerry has an absolute advantage in wine.
D) Ben has a comparative advantage in wine, and Jerry has an absolute advantage in beer.

Question

Figure 3-4 
-Refer to Figure 3-4. What does each of the two producers have a comparative or absolute advantage in?
A) Ben has a comparative advantage in wine, and Jerry has an absolute advantage in both goods. 
B) Ben has a comparative advantage in beer, and Jerry has an absolute advantage in both goods. 
C) Ben has a comparative advantage in beer, and Jerry has an absolute advantage in wine. 
D) Ben has a comparative advantage in wine, and Jerry has an absolute advantage in beer.

Quizplus · Accepted Answer

Ben has a lower opportunity cost of producing wine compared to beer as demonstrated by his lower opportunity cost ratio. This suggests that he has a comparative advantage in wine. Jerry, on the other hand, can produce both goods at a lower cost than Ben, meaning he has an absolute advantage in both goods. Therefore, the correct answer is D, where Ben has a comparative advantage in wine, and Jerry has an absolute advantage in beer.

Figure 3-4 -Refer to Figure 3-4. What Does Each of the Two