Question

Stan’s Sporting Goods is a competitor that can manufacture seven soccer balls out of a possible ten, if it makes one soccer net.

Which statement correctly compares the two businesses?


A. Sabrina’s Soccer has a comparative advantage over Stan’s Sporting Goods because Sabrina’s Soccer has a lower opportunity cost.


B. Stan’s Sporting Goods has a comparative advantage over Sabrina’s Soccer because Stan’s Sporting Goods has a lower opportunity cost.


C. Sabrina’s Soccer has an absolute advantage over Stan’s Sporting Goods because Sabrina’s Soccer has a lower production cost.


D. Stan’s Sporting Goods has an absolute advantage over Sabrina’s Soccer because Stan’s Sporting Goods has a lower production cost.

Answer 1

Stan’s Sporting Goods is a competitor that can manufacture seven soccer balls out of a possible ten, if it makes one soccer net. Which statement correctly compares the two businesses?

[A]Sabrina’s Soccer has a comparative advantage over Stan’s Sporting Goods because Sabrina’s Soccer has a lower opportunity cost.

ANSWER FOR EDGENUIT^

Answer 2

The statement that correctly compares the two businesses is: A. Sabrina's Soccer has a comparative advantage over Stan's Sporting Goods because Sabrina's Soccer has a lower opportunity cost.

It shows how Sabrina’s Soccer has an advantage by providing the proper reasoning by concisely showing its advantage to Stan’s.