It takes Fred 6 hours to produce a bushel of corn and 2 hours to wash and polish a car. It takes Wilma 6 hours to produce a bushel of corn and 1 hour to wash and polish a car. Wilma and Fred cannot gain from specialization and trade, since it takes each of them 6 hours to produce 1 bushel of corn.

Question

Quizplus · Accepted Answer

Wilma has a comparative advantage in washing and polishing cars because she can do it in less time than Fred. Therefore, by specializing in what they are relatively better at and trading, they can both benefit.

It Takes Fred 6 Hours to Produce a Bushel of Corn