Which state has a comparative advantage in wheat production in Case II?
A)South Dakota
B)North Dakota
C)Neither state

Question

Quizplus · Accepted Answer

South Dakota has a comparative advantage in wheat production in Case II because it has a lower opportunity cost of producing wheat than North Dakota. In Case II, South Dakota can produce 1 bushel of wheat with 1 hour of labor, while North Dakota can produce 1 bushel of wheat with 2 hours of labor. This means that South Dakota can produce wheat more efficiently than North Dakota, and therefore has a comparative advantage in wheat production.

Which State Has a Comparative Advantage in Wheat Production in Case