Regan grows flowers and makes ceramic vases.Jayson also grows flowers and makes ceramic vases,but Regan is better at producing both goods.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

Since Regan is better at producing both goods, she has a comparative advantage in both activities. This means that she can produce both goods at a lower opportunity cost than Jayson. Therefore, they can both benefit from trade. For example, Regan can specialize in flower production, while Jayson can specialize in vase production. By trading, they can both obtain more of both goods than they would have been able to produce on their own.

Regan Grows Flowers and Makes Ceramic Vases