Table 3-4 Assume That the Farmer and the Rancher Can Switch Between

question 41

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 2 pounds of meat and 4 pounds of potatoes and the rancher produced and consumed 4 pounds of meat and 2 pounds of potatoes.Then,each person agreed to specialize in the production of the good in which they have a comparative advantage and trade 3 pounds of meat for 6 pounds of potatoes.As a result,the farmer gained

• A) 1 pound of meat and 2 pounds of potatoes and the rancher gained 0 pounds of meat and 5 pounds of potatoes.
• B) 1 pound of meat and 2 pounds of potatoes and the rancher gained 1 pound of meat and 4 pounds of potatoes.
• C) 3 pounds of meat and 6 pounds of potatoes and the rancher gained 5 pounds of meat and 6 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.

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Definitions:

Poor

Refers to individuals or communities lacking financial resources and essentials for a minimum standard of living.

Richer

Having a greater amount of wealth, resources, or assets compared to a previous state or compared to other individuals or entities.

Relative and Absolute Terms

Concepts used to compare differences in terms of relationships or ratios (relative) and fixed values or units (absolute).

Social Security

A government system that provides monetary assistance to people with an inadequate or no income, particularly the elderly, disabled, and families with dependent children.