Table 3-1

-Refer to Table 3-1. How could the Farmer and Rancher both benefit?
A)By the Farmer specializing in meat and the Rancher specializing in potatoes.
B)By the Farmer specializing in potatoes and the Rancher specializing in meat.
C)By the Farmer specializing in neither good and the Rancher specializing in both goods.
D)They cannot benefit by specialization and trade.

Question

Table 3-1
 
-Refer to Table 3-1. How could the Farmer and Rancher both benefit?
A)By the Farmer specializing in meat and the Rancher specializing in potatoes. 
B)By the Farmer specializing in potatoes and the Rancher specializing in meat. 
C)By the Farmer specializing in neither good and the Rancher specializing in both goods. 
D)They cannot benefit by specialization and trade.

Quizplus · Accepted Answer

By specializing in different goods, the Farmer and Rancher can benefit from comparative advantage and trade with each other. The Farmer can focus on growing potatoes, which they can produce at a lower opportunity cost than meat, while the Rancher can focus on producing meat, which they can produce at a lower opportunity cost than potatoes. By trading with each other, they can both obtain both goods at a lower opportunity cost than if they tried to produce both goods themselves. Therefore, option B is the best choice as it explains how the Farmer and Rancher can both benefit from specialization and trade.

Table 3-1 -Refer to Table 3-1. How Could the Farmer and Rancher