Grade 12 · Social studies
Find comparative advantage from opportunity costs
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Example & extra help
Try a sample
A can make 20 loaves and B can make 10, but neither producer’s alternative output is supplied. What prevents a bread comparative-advantage conclusion?
- equal bread opportunity costs
- B has comparative advantage in bread
- the data do not give both alternatives
- A has comparative advantage in bread
See the answer & why
the data do not give both alternatives
Bread output alone does not reveal the amount of another good given up.
A little hint: Use a common time limit and calculate what one extra unit requires giving up.
Use a common time limit and calculate what one extra unit requires giving up.
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