QuestionAugust 19, 2025

Both Amy and Brad produce and consume apple pie and ice cream In one hour, Brad makes five apple pies or ten gallons of ice cream while Amy makes fifteen apple pies or fifteen gallons of ice cream. to Based on the information,one can correctly conclude that A Brad has an absolute advantage in making ice cream and will sell ice cream to Amy B Brad has a comparative advantage in making ice cream and will sell ice cream to Amy C Brad does not have a comparative advantage in making either good and will not trade with Amy D Brad has an absolute advantage in making apple pies but a comparative advantage in making ice cream

Both Amy and Brad produce and consume apple pie and ice cream In one hour, Brad makes five apple pies or ten gallons of ice cream while Amy makes fifteen apple pies or fifteen gallons of ice cream. to Based on the information,one can correctly conclude that A Brad has an absolute advantage in making ice cream and will sell ice cream to Amy B Brad has a comparative advantage in making ice cream and will sell ice cream to Amy C Brad does not have a comparative advantage in making either good and will not trade with Amy D Brad has an absolute advantage in making apple pies but a comparative advantage in making ice cream
Both Amy and Brad produce and consume apple pie and ice cream In one hour, Brad makes five apple pies or ten gallons of ice cream while Amy makes fifteen apple pies or fifteen gallons of ice cream. to Based on the information,one can correctly conclude that A Brad has an absolute advantage in making ice cream and will sell ice cream to Amy B Brad has a comparative advantage in making ice cream and will sell ice cream to Amy C Brad does not have a comparative advantage in making either good and will not trade with Amy D Brad has an absolute advantage in making apple pies but a comparative advantage in making ice cream

Solution
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Answer

B Brad has a comparative advantage in making ice cream and will sell ice cream to Amy Explanation 1. Calculate Brad's Opportunity Cost Brad can make 5 apple pies or 10 gallons of ice cream in one hour. The opportunity cost of making 1 apple pie is 2 gallons of ice cream (\frac{10}{5}), and the opportunity cost of making 1 gallon of ice cream is 0.5 apple pies (\frac{5}{10}). 2. Calculate Amy's Opportunity Cost Amy can make 15 apple pies or 15 gallons of ice cream in one hour. The opportunity cost of making 1 apple pie is 1 gallon of ice cream (\frac{15}{15}), and the opportunity cost of making 1 gallon of ice cream is 1 apple pie (\frac{15}{15}). 3. Compare Opportunity Costs Brad has a lower opportunity cost for making ice cream (0.5 apple pies per gallon) compared to Amy (1 apple pie per gallon). Therefore, Brad has a comparative advantage in making ice cream. 4. Determine Absolute Advantage Amy can produce more apple pies (15 vs. 5) and more ice cream (15 vs. 10) than Brad in one hour, so Amy has an absolute advantage in both goods.

Explanation

1. Calculate Brad's Opportunity Cost<br /> Brad can make 5 apple pies or 10 gallons of ice cream in one hour. The opportunity cost of making 1 apple pie is $2$ gallons of ice cream ($\frac{10}{5}$), and the opportunity cost of making 1 gallon of ice cream is $0.5$ apple pies ($\frac{5}{10}$).<br /><br />2. Calculate Amy's Opportunity Cost<br /> Amy can make 15 apple pies or 15 gallons of ice cream in one hour. The opportunity cost of making 1 apple pie is $1$ gallon of ice cream ($\frac{15}{15}$), and the opportunity cost of making 1 gallon of ice cream is $1$ apple pie ($\frac{15}{15}$).<br /><br />3. Compare Opportunity Costs<br /> Brad has a lower opportunity cost for making ice cream ($0.5$ apple pies per gallon) compared to Amy ($1$ apple pie per gallon). Therefore, Brad has a comparative advantage in making ice cream.<br /><br />4. Determine Absolute Advantage<br /> Amy can produce more apple pies (15 vs. 5) and more ice cream (15 vs. 10) than Brad in one hour, so Amy has an absolute advantage in both goods.
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