John and Mary work eight hours at a bakery. John can decorate either 10 ice-cream cakes or 4 wedding cakes; Mary can decorate either 8 ice-cream cakes or 2 wedding cakes. According to this scenario

Question

Quizplus · Accepted Answer

Mary has the lower opportunity cost in decorating ice-cream cakes compared to John. To make one ice-cream cake, John gives up the opportunity to decorate 2.5 wedding cakes (10 ice-cream cakes / 4 wedding cakes), whereas Mary gives up the opportunity to decorate only 0.25 wedding cakes (8 ice-cream cakes / 2 wedding cakes). Therefore, Mary has the comparative advantage in decorating ice-cream cakes and should specialize in this task while John should specialize in decorating wedding cakes. Together, they can produce more and increase their total output.

John and Mary Work Eight Hours at a Bakery