Figure 3-5
-Refer to Figure 3-5. Ginger should 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 
-Refer to Figure 3-5. Ginger should 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

According to the principle of comparative advantage, Ginger should specialize in the product in which she has a lower opportunity cost. From the given production possibilities frontier, we can see that Ginger has a steeper slope for tap shoes (meaning she has a lower opportunity cost for producing ballet slippers) while Fred has a steeper slope for ballet slippers (meaning he has a lower opportunity cost for producing tap shoes). Therefore, Ginger should specialize in ballet slippers and Fred should specialize in tap shoes.

Figure 3-5 -Refer to Figure 3-5. Ginger Should Specialize in