Use the table below to answer the following questions.
Table 2.4.2
Production for one week by Sheila and Bruce

-Given the information in Table 2.4.2, can Sheila and Bruce gain by specialization?
A)Yes, but only if Bruce gets paid more than Sheila.
B)No, not under the given circumstances.
C)It depends on the wages each earns.
D)Only if they are married to each other.
E)Yes, if each specializes in the good in which he has a comparative advantage.

Question

Use the table below to answer the following questions.
Table 2.4.2
Production for one week by Sheila and Bruce
 
-Given the information in Table 2.4.2, can Sheila and Bruce gain by specialization?
A)Yes, but only if Bruce gets paid more than Sheila. 
B)No, not under the given circumstances. 
C)It depends on the wages each earns. 
D)Only if they are married to each other. 
E)Yes, if each specializes in the good in which he has a comparative advantage.

Quizplus · Accepted Answer

Specialization can only occur if each person specializes in the good in which he or she has a comparative advantage. In this case, Sheila has a comparative advantage in producing umbrellas and Bruce has a comparative advantage in producing hats. If they each specialize in their comparative advantage, they can produce more of each good and trade with each other, resulting in a greater total output for both of them. Therefore, Sheila and Bruce can gain by specialization if each specializes in the good in which he or she has a comparative advantage.

Use the Table Below to Answer the Following Questions