Scott and Cindy both produce only pizza and tacos.In one hour,Scott can produce 20 pizzas or 40 tacos.In one hour,Cindy can produce 30 pizzas or 40 tacos.Based on these data,
A) Cindy has a comparative advantage at producing tacos.
B) Scott has a comparative advantage at producing tacos.
C) Cindy and Scott have the same comparative advantage in producing tacos.
D) neither Cindy nor Scott has a comparative advantage in producing tacos.
E) Cindy and Scott have the same comparative advantage in producing pizzas.

Question

Quizplus · Accepted Answer

Scott has a comparative advantage in producing tacos because he gives up fewer pizzas to produce the same amount of tacos compared to Cindy. Scott sacrifices 0.5 pizzas for each taco (20 pizzas for 40 tacos), whereas Cindy sacrifices 0.75 pizzas for each taco (30 pizzas for 40 tacos). Comparative advantage is determined by who has the lower opportunity cost in production, not by who can produce more overall.

Scott and Cindy Both Produce Only Pizza and Tacos