Using the figure above,if Jack and Jill specialize and gain from trade,then
A) Jack produces equal amounts of gallons of water and bottled water.
B) Jack specializes in the production of bottled water.
C) Jack and Jill produce beyond their PPF.
D) Jack specializes in the production of soda.
E) Jack specializes on the production of soda and water.

Question

Quizplus · Accepted Answer

The figure shows that Jack has a comparative advantage in producing bottled water while Jill has a comparative advantage in producing gallons of water. Therefore, if they specialize and trade, Jack will focus on producing only bottled water while Jill will focus on producing only gallons of water. This will result in both of them producing beyond their PPF and achieving higher levels of consumption by trading with each other.

Using the Figure Above,if Jack and Jill Specialize and Gain