Respuesta :
Answer:
Martha can produce 70 quilts or 140 batches of chocolate chip cookies:
Opportunity cost of producing a quilt = (140 ÷ 70)
= 2 batches of chocolate chip cookies
Opportunity cost of producing a batch of chocolate chip cookie = (70 ÷ 140)
= 0.5 quilts
Jane can produce 8 quilts or 24 batches of chocolate chip cookies:
Opportunity cost of producing a quilt = (24 ÷ 8)
= 3 batches of chocolate chip cookies
Opportunity cost of producing a batch of chocolate chip cookie = (8 ÷ 24)
= 0.33 quilts
Therefore, the comparative advantage is as follows:
Martha has a comparative advantage in producing quilt because it has a lower opportunity cost of producing quilt than Jane.
Jane has a comparative advantage in producing chocolate chip cookies because it has a lower opportunity cost of producing chocolate chip cookies than Martha.
Absolute advantage:
Martha has an absolute advantage in producing both the commodities because she can produce more amount of both the goods from the same level of resources as compared to Jane.
