Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Comparative and absolute advantage Charles and Dina are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of

image text in transcribedimage text in transcribed
2. Comparative and absolute advantage Charles and Dina are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of rye and corn each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing rye or corn or to produce rye on some of the land and corn on the rest. Rye Corn (Bushels per acre) (Bushels per acre) Charles 30 10 Dina 28 On the following graph, use the blue line (circle symbol) to plot Charles's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Dina's PPF. 200 O 180 Charles's PPF 160 140 120 Dina's PPF CORN (Bushels) 100 80 40200 O 180 Charles's PPF 160 140 120 Dina's PPF 100 CORN (Bushels) 60 40 20 0 100 200 3 400 0 500 600 700 800 900 1000 RYE (Bushels) has an absolute advantage in the production of rye, and has an absolute advantage in the production of corn. Charles's opportunity cost of producing 1 bushel of corn is bushels of rye, whereas Dina's opportunity cost of producing 1 bushel of corn is bushels of rye. Because Charles has a opportunity cost of producing corn than Dina, has a comparative advantage in the production of corn, and has a comparative advantage in the production of rye

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

French Banking And Entrepreneurialism In China And Hong Kong From The 1850s To 1980s

Authors: Hubert Bonin

1st Edition

0429560095, 9780429560095

More Books

Students also viewed these Economics questions