Figure 3-3
Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier
-Refer to Figure 3-3.Bob should specialize in the production of
A) tacos and Enid should specialize in the production of burritos.
B) burritos and Enid should specialize in the production of tacos.
C) both goods and Enid should specialize in the production of neither good.
D) neither good and Enid should specialize in the production of both goods.

Question

Figure 3-3
Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier  
-Refer to Figure 3-3.Bob should specialize in the production of
A) tacos and Enid should specialize in the production of burritos. 
B) burritos and Enid should specialize in the production of tacos. 
C) both goods and Enid should specialize in the production of neither good. 
D) neither good and Enid should specialize in the production of both goods.

Quizplus · Accepted Answer

Bob has a comparative advantage in the production of burritos, since he can produce 6 burritos for every 3 tacos he gives up, while Enid can only produce 2 burritos for every 3 tacos she gives up. Enid has a comparative advantage in the production of tacos, since she can produce 6 tacos for every 2 burritos she gives up, while Bob can only produce 3 tacos for every 2 burritos he gives up. Therefore, Bob should specialize in burritos, while Enid should specialize in tacos. This will lead to increased overall production and efficiency, as they can trade with each other to obtain both goods.

Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier