Assume that the farmer and the rancher can switch between producing meat and pro
ID: 1143109 • Letter: A
Question
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.
Labor Hours Needed
to Make 1 Pound of
Pounds Produced
in 40 Hours
Meat
Potatoes
Meat
Potatoes
10
2
4
20
4
8
10
5
Refer to Table 3-4. The farmer should specialize in the production of
Select one:
a. potatoes and the rancher should specialize in the production of meat.
b. both goods and the rancher should specialize in the production of neither good.
c. meat and the rancher should specialize in the production of potatoes.
d. neither good and the rancher should specialize in the production of both goods.
Labor Hours Needed
to Make 1 Pound of
Pounds Produced
in 40 Hours
Meat
Potatoes
Meat
Potatoes
Farmer10
2
4
20
Rancher4
8
10
5
Explanation / Answer
Solution: potatoes and the rancher should specialize in the production of meat.
Explanation:
Farmer
Rancher
Meat
10
4
Potatoes
2
8
Comparative advantage
Meat
10/2 = 5
4/8 = 0.5
Rancher
Potatoes
2/10=0.2
8/4 = 2
Farmer
Farmer
Rancher
Meat
10
4
Potatoes
2
8
Comparative advantage
Meat
10/2 = 5
4/8 = 0.5
Rancher
Potatoes
2/10=0.2
8/4 = 2
Farmer
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.