The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). $$\begin{array} { | l | c | c | c | c | }
\hline &{ \text { Case I } } & &{ \text { Case II } } \
\hline & \text { South Dakota } & \text { North Dakota } & \text { South Dakota } & \text { North Dakota } \
\hline \text { Wheat (bushels) } & 4 & 1 & 3 & 1 \
\hline \text { Beer bottles) } & 1 & 2 & 4 & 2 \
\hline
\end{array}$$ Which state has a comparative advantage in producing beer in Case I?
A)South Dakota
B)North Dakota
C)Neither state
D)Both states

Question

The table below shows the bushels of wheat and the bottles of beer that North and South Dakota can produce per day of labor under two different hypothetical situations (Cases I and II). $$\begin{array} { | l | c | c | c | c | } 
\hline &{ \text { Case I } } & &{ \text { Case II } } \
\hline & \text { South Dakota } & \text { North Dakota } & \text { South Dakota } & \text { North Dakota } \
\hline \text { Wheat (bushels) } & 4 & 1 & 3 & 1 \
\hline \text { Beer bottles) } & 1 & 2 & 4 & 2 \
\hline
\end{array}$$ Which state has a comparative advantage in producing beer in Case I?
A)South Dakota
B)North Dakota
C)Neither state
D)Both states

Quizplus · Accepted Answer

In Case I, North Dakota has a comparative advantage in producing beer because it can produce more bottles of beer per day of labor (2 bottles) compared to South Dakota (1 bottle), indicating a higher efficiency in beer production for North Dakota. Comparative advantage is determined by which entity can produce a good at a lower opportunity cost, and in this scenario, North Dakota's higher production of beer per unit of labor suggests its comparative advantage in beer production.

The Table Below Shows the Bushels of Wheat and the Bottles