Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.

-Refer to Table 3-4.The opportunity cost of 1 pound of potatoes for the rancher is
A) 1/2 pound of meat.
B) 1/2 hour of labor.
C) 2 pounds of meat.
D) 6 hours of labor.

Question

Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.
 
-Refer to Table 3-4.The opportunity cost of 1 pound of potatoes for the rancher is
A) 1/2 pound of meat. 
B) 1/2 hour of labor. 
C) 2 pounds of meat. 
D) 6 hours of labor.

Quizplus · Accepted Answer

The opportunity cost of 1 pound of potatoes for the rancher is 2 pounds of meat. Therefore, the rancher should produce potatoes and trade with the farmer for meat, as the opportunity cost of producing meat for the rancher is higher than that of the farmer.

Table 3-4 Assume That the Farmer and the Rancher Can Switch Between