Table 3-23 Assume That the Farmer and the Rancher Can Switch Between

question 235

Multiple Choice

Table 3-23
Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate.
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-Refer to Table 3-23. The farmer should specialize in the production of

• A)pork and the rancher should specialize in the production of tomatoes.
• B)tomatoes and the rancher should specialize in the production of pork.
• C)both goods and the rancher should specialize in the production of neither good.
• D)neither good and the rancher should specialize in the production of both goods.

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Definitions:

Substitution

The economic principle of replacing one input or good for another due to changes in prices or preferences.

Indifference Curve

A graph representing different combinations of goods or services among which a consumer is indifferent, showing preference levels.

Utility Function

A mathematical representation of a consumer’s preference, showing the amount of satisfaction or utility derived from consuming various bundles of goods and services.

Perfect Complements

Pair of goods that are consumed together in fixed proportions because the consumption of one good enhances the consumption of the other.