Alice can grow 20 tons of apples or 15 tons of pumpkins for Halloween. Bob can grow 15 tons of apples or 10 tons of pumpkins. The opportunity cost to Alice of

Alice can grow 20 tons of apples or 15 tons of pumpkins for Halloween. Bob can grow 15 tons of apples or 10 tons of pumpkins. The opportunity cost to Alice of growing 1 ton of apples is 3/4 ton of pumpkins. The opportunity cost to Alice for growing one ton of pumpkins is 4/3 tons of apples. The opportunity cost to Bob of growing 1 ton of apples is 2/3 ton of pumpkin. For 1 ton of pumpkin it is 3/2 tons of apples. It costs Alice more to grow apples than it costs Bob: 3/4 vs 2/3. It costs Bob more to grow pumpkins than it costs Alice: 3/2 vs 4/3. Although Alice can grow both crops better than Bob can, it is in both their interests to have Alice specialize in pumpkins while Bob specializes in apples. In this simple example--with no other real-life considerations--all or nothing is better for both.