Answer:
B) shirts; computers
Explanation:
This is an example of theory of absolute advantage. It is often used to explain the pattern and benefit of trade between two countries, but it can also explain domestic trade as in this example.
Paula has absolute advantage (is quicker) in producing shirts and Ricardo has absolute advantage (is quicker) in producing computers.
The output is greatest when they produce with their best capacity.
Note: This is should be understood in trade context. That is, the output of Paula and Ricardo are somewhat similarly valuable to them. In normal context 4 computers are likely to count more than 16 shirts in output and so both should produce computers.
