Christy has a comparative advantage over Joel in making pizzas relative to making hotdogs. This means that:
a) Christy makes more pizzas in an hour than Joel does.
b) Christy makes more hotdogs in an hour than Joel does.
c) The opportunity cost of making pizzas is higher for Christy than for Joel.
d) The opportunity cost of making pizzas is lower for Christy than for Joel.
Ans. d) The opportunity cost of making pizzas is lower for Christy than for Joel.
Comparative advantage means that one produces a good at lower opportunity cost than the other. It shows the efficiency of producing that good at a lower cost with efficiency. Here, Christy has a comparative advantage over Joel in making pizzas because Christy has a lower opportunity cost in making pizzas.
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