Madison, the CPA, is faster than Mason, the house painter, at both accounting services and painting. This means that

A) there is no reason for them to trade services.
B) Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more efficient at accounting services.
C) Madison should trade her accounting services for Mason's painting services, so long as Madison is relatively more efficient at painting.
D) Madison has the comparative advantage in both services.

Question

Zybrea Knight · Accepted Answer

Final Answer : B, Explanation :  Madison should trade her accounting services for Mason's painting services if she has a comparative advantage in accounting, meaning she gives up less to perform accounting services than painting services, even if she is absolutely faster at both. This allows both parties to benefit from specialization and trade.

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