Sergei makes millions of dollars a year playing hockey. Sergei is also the best tailor in his hometown in Russia. Based on the theory of specialization, why doesn't Sergei make his own clothes?

Question

Quizplus · Accepted Answer

The theory of specialization suggests that individuals should focus on the activity they have a comparative advantage in and trade with others to obtain goods and services that they are not as good at producing. In this case, Sergei has a comparative advantage in tailoring clothes. However, the opportunity cost of making his own clothes is high because it takes away from his lucrative hockey career which earns him millions of dollars a year. Therefore, it makes more sense for him to specialize in hockey and trade some of his earnings for the skilled labor of a tailor to make his clothes.

Sergei Makes Millions of Dollars a Year Playing Hockey