Question

beth and maria are two farmers with similar endowments of capital and labor, but their land differs in terms of productivity. beth can produce 12 pounds of apples and 10 pounds of potatoes in a day, while maria can produce 8 pounds of apples and 8 pounds of potatoes per day. according to the ricardian theory, which of the following is true?

Answer 1

Answer: Beth has an absolute advantage in both apples and potatoes, but Maria has a comparative advantage in potatoes. So Beth should specialize in the production of apples, and exchange them for Maria's potatoes.

Explanation: