Table 3-1

-Refer to Table 3-1.The farmer has an absolute advantage in
A)meat, and the rancher has an absolute advantage in potatoes.
B)potatoes, and the rancher has an absolute advantage in meat.
C)meat, and the rancher has an absolute advantage in meat.
D)neither good, and the rancher has an absolute advantage in both goods.

Question

Table 3-1
 
-Refer to Table 3-1.The farmer has an absolute advantage in
A)meat, and the rancher has an absolute advantage in potatoes. 
B)potatoes, and the rancher has an absolute advantage in meat. 
C)meat, and the rancher has an absolute advantage in meat. 
D)neither good, and the rancher has an absolute advantage in both goods.

Quizplus · Accepted Answer

To determine who has an absolute advantage, we compare the productivity of each producer for each good. The farmer can produce 10 potatoes or 5 units of meat, while the rancher can produce 20 potatoes or 10 units of meat. This means that the farmer has an absolute advantage in potatoes and the rancher has an absolute advantage in meat. Therefore, the correct choice is B) potatoes, and the rancher has an absolute advantage in meat.

Table 3-1 -Refer to Table 3-1.The Farmer Has an Absolute Advantage in an Absolute