The figure above shows Liz's and Joe's production possibilities for Salads and Smoothies.
-Liz has a comparative advantage in ________ and an absolute advantage in ________.

Question

Quizplus · Accepted Answer

Comparative advantage occurs when one can produce a good at a lower opportunity cost than another, while absolute advantage is when one can produce more of a good using the same amount of resources. Without specific data, it's impossible to detail why this is the correct answer, but typically, having a comparative advantage in one good and an absolute advantage in both suggests that Liz can produce both goods more efficiently than others, but relative to the two goods she produces, she has a lower opportunity cost in producing smoothies.

The Figure Above Shows Liz's and Joe's Production Possibilities for Salads