Question

Suppose Rockette and Zoot Horn can spend their days making cheese or planting beans. Their output per person per hour at each activity is the following:

 

Cheese

Beans

Rockette

7

160

Zoot Horn

6

120

Rockette has _____ in planting beans.

Select one:

A.

only the comparative advantage

B.

both the absolute advantage and the comparative advantage

C.

neither the absolute advantage nor the comparative advantage

D.

only the absolute advantage

Answer 1

A. Only the comparative advantage

Since Rockette can make cheese at lower opportunity cost, Rockette has comparative advantage in cheese.