(Exhibit: Determining Comparative Advantage) Who Has a Comparative Advantage in Baking

question 51

Multiple Choice

(Exhibit: Determining Comparative Advantage) Who has a comparative advantage in baking bread?
$\begin{array}{|l|l|l|}\hline & \text { Opportunity Cost of 1 Bread } & \text { Opportunity Cost of } 1 \text { Cake } \\\hline \text { Eric ( } 4 \text { loaves of bread }=2 \text { cakes }) & 1 / 2 \text { of a cake } & 2 \text { loaves of bread } \\\hline \text { Daisy }(5 \text { loaves of bread }=3 \text { cakes }) & 3 / 5 \text { of a cake } & 12 / 3 \text { loaves of bread } \\\hline\end{array}$

• A) Eric
• B) Daisy
• C) neither Eric nor Daisy
• D) both Eric and Daisy

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Definitions:

Common Law

A body of legal precedents derived from judicial decisions, as opposed to statutes or written laws enacted by legislature.

Judge-made Law

Law established through decisions made by judges in court cases, also known as common law or case law.

Court of Chancery

A court that historically dealt with disputes in equity, such as trusts and estates, rather than legal claims.

Law of Equity

A body of law that supplements the common law and corrects injustices by providing remedies not available in courts of law.