Alice and Gene work in the mailroom,sorting and delivering mail.In order for them to benefit from specialization and trade,Alice must
A) be able to both sort and deliver faster than Gene.
B) be equally productive in both sorting and delivering.
C) have a comparative advantage in both sorting and delivering.
D) have a comparative advantage in one task and Gene must have a comparative advantage in the other task.
E) be equally productive as Gene in both sorting and delivering.

Question

Quizplus · Accepted Answer

For Alice and Gene to benefit from specialization and trade, they must have a comparative advantage in different tasks. This means that Alice may be better at sorting mail while Gene may be better at delivering mail, for example. By specializing in their respective tasks, they can increase their overall productivity and trade with each other to obtain the other's specialized service. Therefore, the correct answer is D: Alice must have a comparative advantage in one task, and Gene must have a comparative advantage in the other task.

Alice and Gene Work in the Mailroom,sorting and Delivering Mail