Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. Jerry has a comparative advantage in:
A. dish production because he has the higher opportunity cost of a dishes.
B. fence production because he has the higher opportunity cost of a fence.
C. dish production because he has the lower opportunity cost of a dishes.
D. fence production because he has the lower opportunity cost of a fence.
Answer: D
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a. (i) only b. (ii) only c. (i) and (ii) only d. (i), (ii), and (iii)
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