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

question 71

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. Without trade, the farmer produced and consumed 2 pounds of pork and 4 pounds of tomatoes and the rancher produced and consumed 4 pounds of pork and 2 pounds of tomatoes. Then, each person agreed to specialize in the production of the good in which he has a comparative advantage and trade 4 pounds of pork for 6 pounds of tomatoes. As a result,

• A)the farmer gained 3 hours worth of production and the rancher gained 4 hours worth of production.
• B)the farmer gained 4 hours worth of production and the rancher gained 6 hours worth of production.
• C)the farmer gained 6 hours worth of production and the rancher gained 8 hours worth of production.
• D)the farmer gained 8 hours worth of production and the rancher gained 10 hours worth of production.

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Definitions:

Shift AA to BA

Moving from one economic point or position (AA) to another (BA), indicating a change in an economic condition or policy impact.

Technological Improvement

The innovation or development of new techniques, methods, or devices that increase productivity and efficiency in processes or products.

Labor Force

The total number of people, including both the employed and the unemployed, who are actively seeking and available for work.

Technological Improvement

Refers to advancements in technology that increase productivity and efficiency in the production process, enhancing the quality and capabilities of goods and services.