The chart shows how many carrots or apples two countries could each grow if they devoted all of their farming resources to one product. Considering the comparative advantage each country has in this situation, which outcome would be most likely?

\begin{tabular}{|c|c|c|}
\hline
& Number of carrots grown per day & Number of apples grown per day \\
\hline
Country A & 40,000 & 10,000 \\
\hline
Country B & 20,000 & 10,000 \\
\hline
\end{tabular}

A. Country A would focus on growing apples to trade with Country B.
B. Country B would have a greater trade deficit than Country A.
C. Country A would focus on growing carrots to trade with Country B.
D. Country B would focus on growing carrots to trade with Country A.



Answer :

To answer this question, we need to determine the comparative advantage for each country. Comparative advantage refers to the ability of a country to produce a particular good at a lower opportunity cost compared to another country.

Here's a step-by-step breakdown:

1. Identify Production Capabilities:
- Country A can produce 40,000 carrots or 10,000 apples.
- Country B can produce 20,000 carrots or 10,000 apples.

2. Calculate Opportunity Cost:
- Opportunity Cost for Country A:
- 1 carrot: [tex]\( \frac{10,000 \text{ apples}}{40,000 \text{ carrots}} = 0.25 \text{ apples} \)[/tex]
- 1 apple: [tex]\( \frac{40,000 \text{ carrots}}{10,000 \text{ apples}} = 4 \text{ carrots} \)[/tex]

- Opportunity Cost for Country B:
- 1 carrot: [tex]\( \frac{10,000 \text{ apples}}{20,000 \text{ carrots}} = 0.5 \text{ apples} \)[/tex]
- 1 apple: [tex]\( \frac{20,000 \text{ carrots}}{10,000 \text{ apples}} = 2 \text{ carrots} \)[/tex]

3. Determine Comparative Advantage:
- Comparative Advantage in Carrots:
- Country A's opportunity cost: 0.25 apples per carrot.
- Country B's opportunity cost: 0.5 apples per carrot.
- Country A has a lower opportunity cost in producing carrots.

- Comparative Advantage in Apples:
- Country A's opportunity cost: 4 carrots per apple.
- Country B's opportunity cost: 2 carrots per apple.
- Country B has a lower opportunity cost in producing apples.

Based on the comparative advantage, the most effective way to maximize production efficiency through trade would be:
- Country A focuses on growing carrots, where it has the comparative advantage.
- Country B focuses on growing apples, where it has the comparative advantage.

Given these observations, the best outcome would be:
C. Country A would focus on growing carrots to trade with country B.