Question

Elizabeth owns a​ take-out counter. In an hour she can produce 40 sandwiches or 40 wraps. Ben also owns a​ take-out counter. In an hour he can produce 20 sandwiches or 10 wraps. ​Elizabeth's opportunity cost of producing 1 sandwich is​ ______. Ben's opportunity cost of producing 1 sandwich is​ ______.A. 1 wrap, 0.5 wrap B. 2 wraps, 1 wrap C. 0.5 wrap, 1 wrap D. 1 wrap, 2 wraps

Answer 1

Option (A) is correct.

Step-by-step explanation:

Elizabeth can produce 40 sandwiches or 40 wraps:

Opportunity cost of producing 1 sandwich = (40 ÷ 40)

= 1 wrap

Ben can produce 20 sandwiches or 10 wraps:

Opportunity cost of producing 1 sandwich = (10 ÷ 20)

= 0.5 wrap

Therefore,

Ben has a comparative advantage in producing sandwiches because he has a lower opportunity cost producing sandwiches than Elizabeth.