Figure 3-5
These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour.
-Refer to Figure 3-5. What should Ginger and Fred specialize in?
A) Ginger should specialize in tap shoes, and Fred should specialize in ballet slippers.
B) Ginger should specialize in both goods, and Fred should specialize in neither good.
C) Ginger should specialize in ballet slippers, and Fred should specialize in tap shoes.
D) Ginger should specialize in neither good, and Fred should specialize in both goods.

Question

Figure 3-5
These graphs illustrate the production possibilities available for dancing shoes to Fred and Ginger with 40 hours of labour. 
-Refer to Figure 3-5. What should Ginger and Fred specialize in?
A) Ginger should specialize in tap shoes, and Fred should specialize in ballet slippers. 
B) Ginger should specialize in both goods, and Fred should specialize in neither good. 
C) Ginger should specialize in ballet slippers, and Fred should specialize in tap shoes. 
D) Ginger should specialize in neither good, and Fred should specialize in both goods.

Quizplus · Accepted Answer

The graph shows that Ginger has a comparative advantage in producing ballet slippers because her opportunity cost of producing 1 pair of ballet slippers is lower than Fred's. Similarly, Fred has a comparative advantage in producing tap shoes as his opportunity cost of producing 1 pair of tap shoes is lower than Ginger's. Therefore, they should specialize in producing the good in which they have a comparative advantage, which will lead to higher total production and efficiency.

Figure 3-5 These Graphs Illustrate the Production Possibilities Available for Dancing Shoes