Figure 3-16
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier
-Refer to Figure 3-16.Merve should specialize in the production of
A)purses.
B)wallets.
C)both goods.
D)neither good.

Question

Figure 3-16
Hosne's Production Possibilities Frontier
Merve's Production Possibilities Frontier  
-Refer to Figure 3-16.Merve should specialize in the production of
A)purses. 
B)wallets. 
C)both goods. 
D)neither good.

Quizplus · Accepted Answer

Merve's production possibilities frontier shows a comparative advantage in producing wallets, as the opportunity cost of producing wallets is lower than the opportunity cost of producing purses. Therefore, Merve should specialize in producing wallets.

Figure 3-16 Hosne's Production Possibilities Frontier