Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Absolute Advantage table [ [ , table [ [ Hours needed to make 1 ] , [ pound of: ] ] ,
Absolute Advantage
tabletableHours needed to make pound of:tableAmount produced in hours hrs:Meat,Potatoes,Meat,PotatoesFarmer hrs hrslb lbs lbsRancher hourlbhrslb lbs lbs
The Rancher needs only hours to produce a pound of potatoes, whereas the Farmer needs hours.
The Rancher needs only hour to produce one pound of meat, whereas the Farmer needs hours.
Even if the Rancher has an absolute advantage in the production of both meat and potatoes, it is still beneficial for him to trade. Why?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started