Suppose the Only Input in Agriculture Is Time and the Following

question 16

Multiple Choice

Suppose the only input in agriculture is time and the following chart depicts the time it took for the Middle Colonies and New England to produce barley and milk.Using the principle of comparative advantage,what would be the most efficient solution?
Time Required to Produce:
$\begin{array}{ccc}\text { Time to produce: } & \begin{array}{c}\text { New } \\\text { England }\end{array} & \begin{array}{c}\text { Middle } \\\text { Colonies }\end{array} \\\hline 1 \text { ton of barley } & 4 \text { hours } & 5 \text { hours } \\1 \text { ton of milk } & 3 \text { hours } & 6 \text { hours } \\\hline\end{array}$

• A)New England produces both barley and milk.
• B)New England produces barley and the Middle Colonies produce milk.
• C)New England produces milk and the Middle Colonies produce barley.
• D)There is insufficient information given to determine comparative advantage.

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Definitions:

Property Rights

The legal rights to possess, use, and dispose of assets, including property and intellectual property.

Allocate Resources

The process of assigning available assets, time, and effort to various tasks or purposes in order to achieve specific goals.

Market Failures

Situations where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Private Goods

Goods that are excludable and rivalrous in consumption, meaning access can be limited and consumption by one individual prevents others from consuming the same good.