It takes Barbara four hours to make a pie and four hours to make a shirt.It takes Gary two hours to make a pie and five hours to make a shirt.Barbara should specialise in making shirts and Gary should specialise in making pies.Then they should trade.

Question

Quizplus · Accepted Answer

Barbara has a comparative advantage in making shirts because she has the same opportunity cost for both tasks, while Gary has a lower opportunity cost for making pies. By specializing in their respective areas of comparative advantage, they can trade and both benefit.

It Takes Barbara Four Hours to Make a Pie and Four