Suppose Ethan and Ava work in a farm that grows apples and oranges of the same size. In one hour, Ethan can pick 8 pounds of apples or 1 pound of oranges. Ava can pick 6 pounds of apples or 1 pound of oranges. It can be concluded that
A) Ava has a comparative advantage in picking apples.
B) Ava has an absolute advantage in picking apples.
C) Ethan has a comparative advantage in picking apples.
D) Ethan has an absolute advantage in picking oranges.

Question

Quizplus · Accepted Answer

To determine who has a comparative advantage, we need to look at the opportunity cost of producing each good. Ethan's opportunity cost of producing 1 pound of apples is 1/8 pound of oranges, while Ava's opportunity cost of producing 1 pound of apples is 1/6 pound of oranges. Therefore, Ethan has a lower opportunity cost in picking apples than Ava, and hence has a comparative advantage in picking apples. None of the other choices are correct based on the information given.

Suppose Ethan and Ava Work in a Farm That Grows