Table 7-1.
Athens and Troy both produce only ribs and baked potatoes.

-Refer to Table 7-1. Which of the following is correct?
A) Both productivity and the standard of living are higher in Athens than Troy.
B) Productivity is higher in Athens while the standard of living is higher in Troy
C) Productivity is higher in Troy while the standard of living is higher in Athens.
D) Both productivity and the standard of living are higher in Troy than Athens.

Question

Table 7-1.
Athens and Troy both produce only ribs and baked potatoes.
 
-Refer to Table 7-1. Which of the following is correct?
A) Both productivity and the standard of living are higher in Athens than Troy. 
B) Productivity is higher in Athens while the standard of living is higher in Troy 
C) Productivity is higher in Troy while the standard of living is higher in Athens. 
D) Both productivity and the standard of living are higher in Troy than Athens.

Quizplus · Accepted Answer

The table shows that Troy produces 40 ribs and 20 baked potatoes while Athens produces 60 ribs and 30 baked potatoes. This means that Athens has a higher productivity since it produces more output with the same inputs. However, the standard of living is not solely determined by productivity but also by the allocation of resources. In this case, since both cities produce the same goods, the allocation of resources will determine the standard of living. Troy produces fewer goods but also has fewer people to feed, which means that its citizens may have a higher standard of living even with lower productivity. Therefore, the correct answer is that Productivity is higher in Troy while the standard of living is higher in Athens.

Table 7-1. Athens and Troy Both Produce Only Ribs and Baked Potatoes