Table 3-2 Farmer Rancher Labour hours needed to make 1 kilogram: Meat C. 4 4 Potatoes 6 Kilograms produced in 12 hours: Meat 3 Refer to Table 3-2. What does each producer have a comparative advantage in? Potatoes 12 a. The rancher has a comparative advantage in neither good, and the farmer has a comparative advantage in both goods. O b. The rancher has a comparative advantage in both goods, and the farmer has a comparative advantage in neither good. The rancher has a comparative advantage in meat, and the farmer has a comparative advantage in potatoes.

Table 3-2 Farmer Rancher Labour hours needed to make 1 kilogram: Meat C. 4 4 Potatoes 6 Kilograms produced in 12 hours: Meat 3 Refer to Table 3-2. What does each producer have a comparative advantage in? Potatoes 12 a. The rancher has a comparative advantage in neither good, and the farmer has a comparative advantage in both goods. O b. The rancher has a comparative advantage in both goods, and the farmer has a comparative advantage in neither good. The rancher has a comparative advantage in meat, and the farmer has a comparative advantage in potatoes.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

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Hand written solutions are strictly prohibited.

Table 3-2
Farmer
Rancher
Labour hours needed to make 1
kilogram:
b.
Meat
C.
4
4
Potatoes
1
6
Kilograms produced in 12 hours:
Meat
3
Refer to Table 3-2. What does each producer have a comparative advantage in?
3
Potatoes
12
a. The rancher has a comparative advantage in neither good, and the farmer has a comparative
advantage in both goods.
The rancher has a comparative advantage in both goods, and the farmer has a comparative
advantage in neither good.
The rancher has a comparative advantage in meat, and the farmer has a comparative advantage in
potatoes.
2

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