Table 3-25
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate.

-Refer to Table 3-25. Maya should specialize in the production of
A)mixers and Miguel should specialize in the production of toasters.
B)toasters and Miguel should specialize in the production of mixers.
C)both goods and Miguel should specialize in the production of neither good.
D)neither good and Miguel should specialize in the production of both goods.

Question

Table 3-25
Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate.
​ 
-Refer to Table 3-25. Maya should specialize in the production of
A)mixers and Miguel should specialize in the production of toasters. 
B)toasters and Miguel should specialize in the production of mixers. 
C)both goods and Miguel should specialize in the production of neither good. 
D)neither good and Miguel should specialize in the production of both goods.

Quizplus · Accepted Answer

According to the table, Maya's opportunity cost for producing one toaster is 2 mixers, while Miguel's opportunity cost for producing one toaster is 1.5 mixers. This means that Miguel has a comparative advantage in producing toasters, as he gives up less of his production of mixers to produce one toaster compared to Maya. Therefore, Maya should specialize in producing mixers (where she has a comparative advantage), while Miguel should specialize in producing toasters (where he has a comparative advantage).

Table 3-25 Assume That Maya and Miguel Can Switch Between Producing Mixers