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Suppose Jean-Luc earns ten dollars for time spent in the labor market or can produce a meal worth five dollars for an hour of cooking. On the other hand, suppose Beverly earns fifteen dollars for time spent in the labor market or can produce a meal also worth fifteen dollars for an hour of cooking. This implies that a) Jean-Luc is not as good (not as efficient) as Beverly in both activities. b) Beverly has absolute advantage in both activities. c) the opportunity cost of a home-cooked meal is lower when Beverly produces it than when Jean-Luc does. d) all of the above are correct.

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Answer:

b) Beverly has absolute advantage in both activities.

Explanation:

Absolute advantage is defined as the ability of an entity to produce more output given the same resources as other entities.

It shows superior production capacity of one entity over another.

In the given scenario Jean-Luc earns ten dollars for time spent in the labor market or can produce a meal worth five dollars for an hour of cooking. On the other hand, suppose Beverly earns fifteen dollars for time spent in the labor market or can produce a meal also worth fifteen dollars for an hour of cooking.

For both time spent in the labour market and in home cooking Beverly outperforms Jean-Luc so she has absolute advantage in bother activities.

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