Multiple Choice
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.
Correct Answer:
Verified
Correct Answer:
Verified
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