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Why did Greta buy apples from Carlos even though she could have produced them more efficiently herself?

User Acer
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Final answer:

Greta might buy apples from Carlos because she practices economic specialization, focusing on her consulting work instead, which is more productive and financially beneficial than growing apples herself.

Step-by-step explanation:

The reason Greta might choose to buy apples from Carlos, even if she could produce them more efficiently herself, stems from the economic principle of comparative advantage. This concept, often used to explain trade between nations, can also apply to individuals like Greta and Carlos. As Adam Smith argued, it's more beneficial for entities to specialize in producing goods or services they're relatively more efficient at and trade for others, rather than producing everything themselves.

Even though Greta is capable of producing apples, her time might be better spent in her consulting job where she's highly productive, leading to a greater income than the savings she'd gain by growing her own apples. Essentially, Greta is practicing specialization of labor, focusing on her consulting work, and trading her income for apples, taking advantage of a division of labor that ultimately leads to increased overall efficiency and economic gain for both parties involved.

User Chris Mikkelsen
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