Table 3-11
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.

-Refer to Table 3-11.Falda has a comparative advantage in the production of
A) wheat.
B) cloth.
C) both goods.
D) neither good.

Question

Table 3-11
Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.
 
-Refer to Table 3-11.Falda has a comparative advantage in the production of
A) wheat. 
B) cloth. 
C) both goods. 
D) neither good.

Quizplus · Accepted Answer

As per the table, Falda can produce 20 units of wheat or 10 units of cloth in the given time. On the other hand, Varick can produce only 10 units of wheat or 10 units of cloth in the given time. Thus, Falda has a comparative advantage in the production of wheat since she can produce more wheat than Varick in the given time.

Table 3-11 Assume That Falda and Varick Can Switch Between Producing Wheat