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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
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 7 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 60 Explore(? 200 O 180 160 Charles's PPF 140 120 Dina's PPF CORN (Bushels) 100 80 GO 40 20 0 100 300 400 500 600 700 800 900 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. Grade It Now Save & Continue Continue without saving
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