Multiple Choice
In one hour,Sue can produce 50 caps or 10 jackets and Tessa can produce 70 caps or 7 jackets.Sue's opportunity cost of producing a cap is ________ jackets and Tessa's opportunity cost of producing a cap is ________ jackets.
________ has a comparative advantage in producing caps.
If Sue and Tessa each specialize in producing the good in which they have a comparative advantage and trade 1 jacket for 7 caps,________.
A) 0.2;0.10;Sue;Tessa gains but Sue loses
B) 5.0;10.0;Tessa;Sue loses but Tessa gains
C) 5.0;10.0;Sue;both Sue and Tessa gain
D) 0.2;0.10;Tessa;both Sue and Tessa gain
E) 0.2;0.10;Sue;both Sue and Tessa gain
Correct Answer:

Verified
Correct Answer:
Verified
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