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 the opportunity cost of making pizzas is higher for Christy than for Joel. C Christy makes more hotdogs in an hour than Joel does. D the opportunity cost of making pizzas is lower for Christy than for Joel.

The answer is D. The opportunity cost of making pizzas is lower for Christy than for Joel.

Explanation:

A country has a comparative advantage in producing a good and service if its opportunity cost of producing that good and service is less than that of its trading partner.

This should not be confused with an absolute advantage which is producing a good and service at a lower cost than its trading partner.

The difference between this two is that comparative advantage centers on lower opportunity cost (which is the alternative forgone i.e the idea one abadons for the chosen idea. For example Mr A. has a choice between buying a shoe and a shirt. He then goes for shoe. So the opportunity cost here is the shirt that he did not buy.)

In the context of comparative advantage now, let's say Country A produces either 3 shirt or 6 shoes per worker per day and country B produces 5 shirt or 5 shoes per worker per day.

The opportunity cost of 1 shirt for Country A is 2 shoes and The opportunity cost of 1 shoe is 0.5 shirt while The opportunity cost of 5 shirt for Country B is 1 shoe and The opportunity cost of 5 shirt is 1 shoe

Here, Country A has a comparative advantage in producing shoe because it has a lower opportunity cost (0.5) while Country B has a comparative advantage in producing shirt because it has a lower opportunity cost (1)

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