If resources and goods are free to move across states and if Oregon producers choose to specialize in producing honey while California producers choose to specialize in growing almonds, then we could reasonable conclude that:
A)California has a comparative advantage in producing almonds.
B)Oregon has a comparative advantage in producing honey.
C)the opportunity cost of growing almonds is lower in California than in Oregon.
D)all of the above are true.

Question

If resources and goods are free to move across states and if Oregon producers choose to specialize in producing honey while California producers choose to specialize in growing almonds, then we could reasonable conclude that:
A)​California has a comparative advantage in producing almonds.
B)​Oregon has a comparative advantage in producing honey.
C)​the opportunity cost of growing almonds is lower in California than in Oregon.
D)​all of the above are true.

Quizplus · Accepted Answer

If resources and goods are free to move across states and Oregon specializes in producing honey while California specializes in growing almonds, it means that each state has a comparative advantage in their respective products. Thus, choice A and B are correct. Moreover, the fact that each state specializes in the production of a specific product indicates that they have a lower opportunity cost of producing that product compared to the other state. Therefore, choice C is also true. Hence, option D is the correct answer.

If Resources and Goods Are Free to Move Across States