Tanya can make 33 loaves of breadloaves of bread or 1 apple pieapple pie in one hour. Jonathan can make 22 loaves of breadloaves of bread or 1 apple pieapple pie in one hour. Based on this information, which of the following is a true statement?

A. Tanya has a comparative advantage in making apple piesapple pies.

B. Jonathan has an absolute advantage in making breadbread.

C. Tanya has a comparative advantage in making breadbread.

D. Jonathan has a comparative advantage in making breadbread.

Question

Business

Giana Branch

19 January, 02:30

Tanya can make 33 loaves of breadloaves of bread or 1 apple pieapple pie in one hour. Jonathan can make 22 loaves of breadloaves of bread or 1 apple pieapple pie in one hour. Based on this information, which of the following is a true statement?

A. Tanya has a comparative advantage in making apple piesapple pies.

B. Jonathan has an absolute advantage in making breadbread.

C. Tanya has a comparative advantage in making breadbread.

D. Jonathan has a comparative advantage in making breadbread.

+4

Answers (1)

Know the Answer?

Eddy · Answer 1

C. Tanya has a comparative advantage in making bread loaves.

Explanation:

Comparative advantage describes the ability of an individual, firm, or country to produce a particular product at a lower cost than everybody else. A party has a comparative advantage if it can produce the same quantity of goods as others using fewer inputs. A business or a country that has a comparative advantage can sell them at a lower price than its competitors.

Tanya has a comparative advantage in making bread. He produces 33 units per hour as compared to 22 units by Jonathan. Tanya's comparative advantage arises in the use of labor as a factor of production. He uses less labor per unit of bread loaves, which makes his cost of production lower than that of Jonathan. He can sell his bread loaves at a lower price compared to Jonathan.