Kelly and David are both capable of repairing cars and cooking meals.Which of the following scenarios is not possible?
A)Kelly has a comparative advantage in repairing cars and David has a comparative advantage in cooking meals.
B)Kelly has an absolute advantage in repairing cars and David has an absolute advantage in cooking meals.
C)Kelly has a comparative advantage in repairing cars and in cooking meals.
D)David has an absolute advantage in repairing cars and in cooking meals.

Question

Quizplus · Accepted Answer

According to the principle of comparative advantage, each person should specialize in the task they have a comparative advantage in and trade with each other. Therefore, it is not possible for one person to have a comparative advantage in both repairing cars and cooking meals since they would then have no incentive to trade with the other person. This rules out options A, C, and D. Option B is possible, but not as likely since it is rare for one person to have an absolute advantage in both tasks.

Kelly and David Are Both Capable of Repairing Cars and Cooking