Multiple Choice
Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake. Which of the following statements is correct?
A) Cathy has a comparative advantage in pies, and Lewis has an absolute advantage in pies.
B) Cathy has a comparative and absolute advantage in pies.
C) Lewis has a comparative and absolute advantage in pies.
D) Lewis has a comparative advantage in pies, and Cathy has an absolute advantage in pies.
Correct Answer:
Verified
Correct Answer:
Verified
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