Question

Jody and Buster both produce nuts and coffee. They each prefer to consume a diet that is half nuts and half coffee. Both have access to the same resources. If Jody focuses on producing only coffee, she can produce 20 pounds of coffee in a week. If she only produces nuts, she can produce 40 pounds of nuts in a week. Buster can produce a maximum of 15 pounds of coffee in a week. He could also choose to produce only nuts, in which case he can produce 20 pounds of nuts a week.

Who has an absolute advantage in nut production? Choose one:

a. Brad has an absolute advantage in coffee, and Jody has an absolute advantage in nuts.
b. Jody has an absolute advantage in coffee, and Brad has an absolute advantage in nuts.
c. Jody has an absolute advantage in both coffee and nuts.
d. Brad has an absolute advantage in both coffee and nuts.

Answer 1

Answer:

c

Explanation:

A person has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other people.

Jody can produce either 20 pounds of coffee or 40 pounds of nuts

Buster can produce either 15 pounds of coffee or 20 pounds of nuts

It can be seen that Jody produces more pounds of both goods. Thus Jody has an absolute advantage in the production of both goods