Suppose Cathy and Lewis Work in a Bakery Making Pies

question 71

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.

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Definitions:

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