Juanita, a lawyer, can type faster than Jill, her secretary. Jill, on the other hand, does not have the ability or skills to practice law. Applying the principles of international trade to this situation, an economic consultant advises Juanita to:

Question

Quizplus · Accepted Answer

The principle of comparative advantage suggests that individuals or countries should specialize in the production of goods or services that they can produce more efficiently than others, and trade with others for goods or services that they cannot produce as efficiently. In this situation, Juanita has a comparative advantage in practicing law, while Jill has a comparative advantage in typing. Therefore, it would be most efficient for Juanita to specialize in practicing law, and leave typing to Jill, who can do it more efficiently. This would maximize their productivity and benefit their organization.

Juanita, a Lawyer, Can Type Faster Than Jill, Her Secretary