Question

using comparative advantage
production possibility schedule
violins made per week guitars made per week
annies music 2 10
the music factory 20 20
has the comparative advantage in making guitars.
annies music
the music factory

Explanation:

Step1: Calculate opportunity - cost for Annie's Music

To make 10 guitars, Annie's Music gives up making 2 violins. So the opportunity - cost of 1 guitar is $\frac{2}{10}=0.2$ violins.

Step2: Calculate opportunity - cost for The Music Factory

To make 20 guitars, The Music Factory gives up making 20 violins. So the opportunity - cost of 1 guitar is $\frac{20}{20}=1$ violin.

Step3: Compare opportunity - costs

Since $0.2<1$, Annie's Music has a lower opportunity - cost in making guitars.

Answer:

Annie's Music