Table 3-30
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.
-Refer to Table 3-30. Varick has an absolute advantage in the production of
A)wheat.
B)cloth.
C)both goods.
D)neither good.

Question

Table 3-30
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate. 
-Refer to Table 3-30. Varick has an absolute advantage in the production of
A)wheat. 
B)cloth. 
C)both goods. 
D)neither good.

Quizplus · Accepted Answer

Varick has an absolute advantage in producing cloth as they can produce 220 units of cloth compared to Falda's 180 units. Therefore, Varick should specialize in producing cloth while Falda should specialize in producing wheat to maximize efficiency and increase overall production.

Table 3-30 Assume That Falda and Varick Can Switch Between Producing Wheat