-Refer to Table 3-2. What does each producer have a comparative advantage in?
A) The rancher has a comparative advantage in neither good, and the farmer has a comparative advantage in both goods.
B) The rancher has a comparative advantage in both goods, and the farmer has a comparative advantage in neither good.
C) The rancher has a comparative advantage in meat, and the farmer has a comparative advantage in potatoes.
D) The rancher has a comparative advantage in potatoes, and the farmer has a comparative advantage in meat.

Question

-Refer to Table 3-2. What does each producer have a comparative advantage in?
A) The rancher has a comparative advantage in neither good, and the farmer has a comparative advantage in both goods. 
B) The rancher has a comparative advantage in both goods, and the farmer has a comparative advantage in neither good. 
C) The rancher has a comparative advantage in meat, and the farmer has a comparative advantage in potatoes. 
D) The rancher has a comparative advantage in potatoes, and the farmer has a comparative advantage in meat.

Quizplus · Accepted Answer

Comparative advantage is determined by who has the lower opportunity cost in producing a good. Without seeing Table 3-2, the correct answer cannot be definitively determined. However, based on the structure of the question, option C suggests a typical scenario where each producer specializes in producing the good for which they have a lower opportunity cost, thus having a comparative advantage in that good.