Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.

-Refer to Table 3-4.The farmer should specialize in the production of
A) meat and the rancher should specialize in the production of potatoes.
B) potatoes and the rancher should specialize in the production of meat.
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 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.
 
-Refer to Table 3-4.The farmer should specialize in the production of
A) meat and the rancher should specialize in the production of potatoes. 
B) potatoes and the rancher should specialize in the production of meat. 
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 farmer has a comparative advantage in producing potatoes (can produce 10 potatoes instead of 4 meat), while the rancher has a comparative advantage in producing meat (can produce 4 meat instead of 2 potatoes). Therefore, it would be most efficient for the farmer to specialize in potatoes and the rancher to specialize in meat production.

Table 3-4 Assume That the Farmer and the Rancher Can Switch Between