If Toni has an absolute advantage in both sewing and ironing when compared to Tom,then
A) they might benefit from trading, but we need more information to determine in which task they should specialize.
B) neither Toni nor Tom can benefit from trading with each other.
C) Toni should specialize in sewing, and Tom should specialize in ironing.
D) Toni cannot benefit from trading with Tom, but Tom can benefit from trading with Toni.
E) Tom cannot benefit from trading with Toni, but Toni can benefit from trading with Tom.

Question

Quizplus · Accepted Answer

Even if Toni has an absolute advantage in both sewing and ironing, we need to know their opportunity costs for each task in order to determine their comparative advantage and to decide which task they should specialize in. Therefore, the best option is A, which suggests that they might benefit from trading, but more information is needed to determine their specialization.

If Toni Has an Absolute Advantage in Both Sewing and Ironing