Regan grows flowers and makes ceramic vases.Jayson also grows flowers and makes vases,but Regan is better at producing both.In this case,trade could
A)benefit both Jayson and Regan.
B)benefit Jayson, but not Regan.
C)benefit Regan, but not Jayson.
D)benefit neither Jayson nor Regan.

Question

Quizplus · Accepted Answer

Regan has a comparative advantage in both growing flowers and making vases, which means she can produce these goods at a lower opportunity cost than Jayson. Jayson also has a comparative advantage, but only in one of the two goods. By trading, Regan can specialize in producing the good that she is relatively better at, while Jayson can do the same with the other good. This will lead to a more efficient allocation of resources, increased output, and ultimately higher welfare for both parties.

Regan Grows Flowers and Makes Ceramic Vases