In One Hour John Can Produce 20 Loaves of Bread

question 230

Multiple Choice

In one hour John can produce 20 loaves of bread or 8 cakes.In one hour Phyllis can produce 30 loaves of bread or 15 cakes.Which of the following statements is true?

• A) Phyllis has a comparative advantage in producing bread.
• B) John has a comparative advantage in producing cakes.
• C) Phyllis has an absolute advantage in both goods.
• D) John has an absolute advantage in both goods.
• E) Phyllis has a comparative advantage in producing both cakes and bread.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, often reported as a non-operating expense on the income statement.