Table 3-1

-According to Table 3-1:
A) the potato farmer and cattle farmer both could benefit by the potato farmer specialising in meat, and the cattle farmer specialising in potatoes
B) the potato farmer and cattle farmer both could benefit by the potato farmer specialising in potatoes, and the cattle farmer specialising in meat
C) the potato farmer and cattle farmer both could benefit by the potato farmer specialising in neither goods, and the cattle farmer specialising in meat
D) the potato farmer and cattle farmer cannot benefit by specialisation and trade

Question

Table 3-1
 
-According to Table 3-1:
A) the potato farmer and cattle farmer both could benefit by the potato farmer specialising in meat, and the cattle farmer specialising in potatoes 
B) the potato farmer and cattle farmer both could benefit by the potato farmer specialising in potatoes, and the cattle farmer specialising in meat 
C) the potato farmer and cattle farmer both could benefit by the potato farmer specialising in neither goods, and the cattle farmer specialising in meat 
D) the potato farmer and cattle farmer cannot benefit by specialisation and trade

Quizplus · Accepted Answer

The table shows that the potato farmer has a comparative advantage in producing potatoes, while the cattle farmer has a comparative advantage in producing meat. Therefore, both farmers could benefit by specializing in the production of the good in which they have a comparative advantage.

Table 3-1 -According to Table 3-1