Which statement best describes the absolute advantage as shown in the graphs?
A) Pam has an absolute advantage in the production of both.
B) Jim has an absolute advantage in the production of both.
C) Jim has an absolute advantage in the production of pizzas, and Pam has an absolute advantage in the production of stromboli.
D) Pam has an absolute advantage in the production of pizzas, and Jim has an absolute advantage in the production of stromboli.
E) They both have an absolute advantage in the production of stromboli.

Question

Quizplus · Accepted Answer

Absolute advantage refers to an individual or country's ability to produce a particular good or service with fewer resources than another individual or country. Looking at the graphs, Jim can produce 8 pizzas in 2 hours or 16 strombolis in 2 hours. Pam, on the other hand, can produce 12 pizzas in 2 hours or 18 strombolis in 2 hours. Therefore, Pam has an absolute advantage in the production of pizzas and Jim has an absolute advantage in the production of strombolis. Thus, the correct choice is D.

Which Statement Best Describes the Absolute Advantage as Shown in the Graphs