Use the production possibilities data below to answer the following question(s).
Table 2-3

-Refer to Table 2-3. The farmer and the rancher both could benefit if the farmer were to specialize in
A) meat and the rancher were to specialize in potatoes.
B) potatoes and the rancher were to specialize in meat.
C) neither good and the rancher were to specialize in both goods.
D) none of the above; they cannot both benefit by specialization and trade.

Question

Use the production possibilities data below to answer the following question(s).
Table 2-3
 
-Refer to Table 2-3. The farmer and the rancher both could benefit if the farmer were to specialize in
A) meat and the rancher were to specialize in potatoes. 
B) potatoes and the rancher were to specialize in meat. 
C) neither good and the rancher were to specialize in both goods. 
D) none of the above; they cannot both benefit by specialization and trade.

Quizplus · Accepted Answer

Specialization and trade are beneficial when each party focuses on producing the good for which they have a comparative advantage. If the farmer specializes in potatoes and the rancher in meat, they can trade to mutual benefit.

Use the Production Possibilities Data Below to Answer the Following