Use the table below to answer the following questions.
Table 2.3.2
-Given the information in Table 2.3.2, can Sheila and Bruce gain by specialization?
A)Yes, but only if Bruce gets paid more than Sheila.
B)It depends on the wages each earns.
C)No, not under the given circumstances.
D)Yes, if each specializes in the good in which they have a comparative advantage.
E)Only if they are married to each other.

Question

Use the table below to answer the following questions.
Table 2.3.2 
-Given the information in Table 2.3.2, can Sheila and Bruce gain by specialization?
A)Yes, but only if Bruce gets paid more than Sheila. 
B)It depends on the wages each earns. 
C)No, not under the given circumstances. 
D)Yes, if each specializes in the good in which they have a comparative advantage. 
E)Only if they are married to each other.

Quizplus · Accepted Answer

In order for Sheila and Bruce to gain by specialization, they must each specialize in the good in which they have a comparative advantage. The table shows that Sheila has a comparative advantage in producing apples (1 apple = 2 oranges) while Bruce has a comparative advantage in producing oranges (1 orange = 0.5 apples). Therefore, if they specialize in their respective goods, they can each produce more of their specialized good and trade with each other, resulting in a higher total output for both of them.

Use the Table Below to Answer the Following Questions