Table 3-12

-Refer to Table 3-1.Relative to the rancher,the farmer has
A) a comparative advantage in the production of meat, because the farmer's opportunity cost of a pound of meat is lower than the rancher's opportunity cost of a pound of meat.
B) a comparative advantage in the production of potatoes, because the rancher requires less time than the farmer to produce a pound of potatoes.
C) a comparative advantage in the production of potatoes; relative to the farmer, the rancher has a comparative advantage in the production of meat.
D) an absolute advantage in the production of both meat and potatoes.

Question

Table 3-12
 
-Refer to Table 3-1.Relative to the rancher,the farmer has
A) a comparative advantage in the production of meat, because the farmer's opportunity cost of a pound of meat is lower than the rancher's opportunity cost of a pound of meat. 
B) a comparative advantage in the production of potatoes, because the rancher requires less time than the farmer to produce a pound of potatoes. 
C) a comparative advantage in the production of potatoes; relative to the farmer, the rancher has a comparative advantage in the production of meat. 
D) an absolute advantage in the production of both meat and potatoes.

Quizplus · Accepted Answer

Table 3-1 shows that the rancher has a lower opportunity cost for producing meat compared to potatoes, while the farmer has a lower opportunity cost for producing potatoes compared to meat. This implies that the farmer has a comparative advantage in producing potatoes and the rancher has a comparative advantage in producing meat.

Table 3-12 -Refer to Table 3-1.Relative to the Rancher,the Farmer Has