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:

Scrap Value

The estimated residual value of an asset after it has reached the end of its useful life.

Transmitter

A device that sends signals, such as radio waves, from one location to another, typically used in communication systems.

Double-Declining-Balance

An accelerated depreciation method that doubles the rate at which an asset's book value is reduced compared to straight-line depreciation.

Scrap Value

A projection of the sale price for an asset at the point where it ceases to have utility.