Use the production possibilities data below to answer the following question(s).
Table 2-3

Refer to Table 2-3. The rancher has a comparative advantage in
A) neither good, and the farmer has a comparative advantage in both goods.
B) both goods, and the farmer has a comparative advantage in neither good.
C) potatoes, and the farmer has a comparative advantage in meat.
D) meat, and the farmer has a comparative advantage in potatoes.

Question

Use the production possibilities data below to answer the following question(s).
Table 2-3

Refer to Table 2-3. The rancher has a comparative advantage in
A) neither good, and the farmer has a comparative advantage in both goods. 
B) both goods, and the farmer has a comparative advantage in neither good. 
C) potatoes, and the farmer has a comparative advantage in meat. 
D) meat, and the farmer has a comparative advantage in potatoes.

Quizplus · Accepted Answer

The rancher is able to produce 2 units of meat for every unit of potatoes, while the farmer can only produce 1.5 units of meat for every unit of potatoes. Therefore, the rancher has a lower opportunity cost for producing meat and has a comparative advantage in producing meat, while the farmer has a lower opportunity cost for producing potatoes and has a comparative advantage in producing potatoes.

Use the Production Possibilities Data Below to Answer the Following