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.Without trade,the farmer produced and consumed 3 pounds of meat and 5 pounds of potatoes and the rancher produced and consumed 4 pounds of meat and 3 pounds of potatoes.Then,each person agreed to specialize in the production of the good in which they have a comparative advantage and trade 4 pounds of meat for 8 pounds of potatoes.As a result,the farmer gained
A) 1 pound of meat and 3 pounds of potatoes and the rancher gained 0 pounds of meat and 5 pounds of potatoes.
B) 1 pound of meat and 7 pounds of potatoes and the rancher gained 2 pounds of meat and 5 pounds of potatoes.
C) 4 pounds of meat and 8 pounds of potatoes and the rancher gained 4 pounds of meat and 8 pounds of potatoes.
D) 4 pounds of meat and 12 pounds of potatoes and the rancher gained 6 pounds of meat and 8 pounds of potatoes.

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.Without trade,the farmer produced and consumed 3 pounds of meat and 5 pounds of potatoes and the rancher produced and consumed 4 pounds of meat and 3 pounds of potatoes.Then,each person agreed to specialize in the production of the good in which they have a comparative advantage and trade 4 pounds of meat for 8 pounds of potatoes.As a result,the farmer gained
A) 1 pound of meat and 3 pounds of potatoes and the rancher gained 0 pounds of meat and 5 pounds of potatoes. 
B) 1 pound of meat and 7 pounds of potatoes and the rancher gained 2 pounds of meat and 5 pounds of potatoes. 
C) 4 pounds of meat and 8 pounds of potatoes and the rancher gained 4 pounds of meat and 8 pounds of potatoes. 
D) 4 pounds of meat and 12 pounds of potatoes and the rancher gained 6 pounds of meat and 8 pounds of potatoes.

Quizplus · Accepted Answer

After specialization and trade, the farmer produces only potatoes and the rancher produces only meat. The farmer gains 7 pounds of potatoes (5 from before + 2 from trade) and loses 3 pounds of meat (all meat production). The rancher gains 2 pounds of meat (all meat production - 4 traded away) and gains 5 pounds of potatoes (3 from before + 2 traded for). Thus, the farmer gains 1 pound of potatoes and loses 3 pounds of meat, while the rancher gains 2 pounds of meat and 5 pounds of potatoes. Therefore, the best choice is B.

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