Bill and Fred bake cakes and pies.  Bill's opportunity cost of baking 1 pie is 3 cakes.  Fred's opportunity cost of baking 1 pie is 5 cakes.  Who should bake the pie?Group of answer choicesFredBill A country should specialize in producing the goods for which it has the highest opportunity cost.Group of answer choicesTrueFalse If a country has a comparative advantage in producing fish, then they must also have an absolute advantage in producing fish.Group of answer choicesTrueFalse

Question
Asked Sep 12, 2019
Bill and Fred bake cakes and pies.  Bill's opportunity cost of baking 1 pie is 3 cakes.  Fred's opportunity cost of baking 1 pie is 5 cakes.  Who should bake the pie?
Group of answer choices
Fred
Bill
 
A country should specialize in producing the goods for which it has the highest opportunity cost.
Group of answer choices
True
False
 
If a country has a comparative advantage in producing fish, then they must also have an absolute advantage in producing fish.
Group of answer choices
True
False
check_circleExpert Solution
Step 1

Bill's opportunity cost of baking 1 pie is 3 cakes.  Fred's opportunity cost of baking 1 pie is 5 cakes.  As bill's opportunity cost is lower, he has the comparative advantage and thus must bake the pie.

Answer

Bill must bake the pie

Step 2

A country will have comparative advantage in producing goods for which its opportunity cost is the lowest. A country should  therefore spe...

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