Table 2.4 Table 2.4 shows the output per week of two jewellers, Serena and Haley.They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.4.Which of the following statements is true?

Question

Table 2.4  Table 2.4 shows the output per week of two jewellers, Serena and Haley.They can either devote their time to making bracelets or making necklaces.
-Refer to Table 2.4.Which of the following statements is true?

Quizplus · Accepted Answer

To determine comparative advantage, we need to compare the opportunity cost of producing one good in terms of the other good. For Haley, the opportunity cost of producing one bracelet is 2 necklaces, while the opportunity cost of producing one necklace is 0.5 bracelets. This means Haley has a comparative advantage in making necklaces. For Serena, the opportunity cost of producing one bracelet is 1.5 necklaces, while the opportunity cost of producing one necklace is 0.75 bracelets. This means Serena has a comparative advantage in making necklaces. Therefore, Serena has a comparative advantage in making necklaces, while Haley has a comparative advantage in making bracelets.

Table 24 Table 2