Table 3-23
Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate.

-Refer to Table 3-23. The farmer should specialize in the production of
A)pork and the rancher should specialize in the production of tomatoes.
B)tomatoes and the rancher should specialize in the production of pork.
C)both goods and the rancher should specialize in the production of neither good.
D)neither good and the rancher should specialize in the production of both goods.

Question

Table 3-23
Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate.
​ 
-Refer to Table 3-23. The farmer should specialize in the production of
A)pork and the rancher should specialize in the production of tomatoes. 
B)tomatoes and the rancher should specialize in the production of pork. 
C)both goods and the rancher should specialize in the production of neither good. 
D)neither good and the rancher should specialize in the production of both goods.

Quizplus · Accepted Answer

​According to the table, the opportunity cost of producing 1 pound of pork is 2.5 pounds of tomatoes for the farmer, and 1 pound of tomatoes is 0.4 pounds of pork for the rancher. Therefore, the rancher has a comparative advantage in producing pork since their opportunity cost of producing 1 pound of pork is lower than that of the farmer. Likewise, the farmer has a comparative advantage in producing tomatoes since their opportunity cost of producing 1 pound of tomatoes is lower than that of the rancher. Therefore, the farmer should specialize in producing tomatoes and the rancher should specialize in producing pork to maximize overall production.

Table 3-23 Assume That the Farmer and the Rancher Can Switch Between