Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. If Tom and Jerry trade
A) Tom will benefit and Jerry will not.
B) Jerry will benefit and Tom will not.
C) both will benefit.
D) none of them will benefit.

Question

Quizplus · Accepted Answer

Tom has a comparative advantage in making sandwiches because he takes less additional time to make a sandwich compared to cooking an egg than Jerry does (5 minutes vs. 3 minutes, but the difference in cooking an egg is greater). Jerry has a comparative advantage in cooking eggs because he takes less time to cook an egg compared to Tom. By specializing in their comparative advantages and trading, both can benefit from increased efficiency.

Tom Takes 20 Minutes to Cook an Egg and 5