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Robinson Crusoe and Chuck Noland are stranded together on a deserted island. They survive by eating...

Robinson Crusoe and Chuck Noland are stranded together on a deserted island. They survive by eating coconuts and fish. Rob has a comparative advantage over Chuck in coconut production. What does this mean?

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Answer #1

If Rob has comparative advantage over Chuck in coconut production, then it also implies that Chuck must be having a comparative advantage over Rob in fish production. When two parties have comparative advantage in production of two goods, they can specialize in their production and gain from trade. In this case, Rob should follow his comparative advantage and produce only coconut. Similarly, Chuck should follow his comparative advantage and produce only fish. When they trade they can benefit from such specialization by consuming more.

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