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

question 339

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.Assume that the farmer and the rancher each has 40 labor hours available.If each person spends all his time producing the good in which he has a comparative advantage and trade takes place at a price of 2 pounds of meat for 6 pounds of potatoes,then

• A) the farmer and the rancher will both gain from this trade.
• B) the farmer will gain from this trade,but the rancher will not.
• C) the rancher will gain from this trade,but the farmer will not.
• D) neither the farmer nor the rancher will gain from this trade.

Understand the flow of goods, services, and money within the economic system as illustrated by the circular flow diagram.

Recognize the impact of market system structures on production, innovation, and risk distribution.

Understand the characteristics and importance of work engagement.

Recognize the role of corporate social responsibility in organizations.

---

Definitions:

Free Markets

Economic systems where transactions are conducted without significant government intervention, allowing for the free exchange of goods and services based on supply and demand.

Education Levels

The attainment or degree of educational qualifications measured across a population, reflecting various stages like primary, secondary, and tertiary education.

Literacy Rates

Literacy Rates measure the percentage of the population over a certain age that can read and write, often used as an indicator of educational achievement.

Convergence

A theory predicting that the standard of living in economies around the world will grow more similar over time, with poorer countries eventually catching up with richer ones.