2. Comparative and absolute advantage

Felix and Janet 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)
Felix	40	8
Janet	28	7

On the following graph, use the blue line (circle symbol) to plot Felix's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Janet's PPF.

Felix's PPFJanet's PPF01002003004005006007008009001000200180160140120100806040200CORN (Bushels)RYE (Bushels)

has an absolute advantage in the production of rye, and has an absolute advantage in the production of corn.

Felix's opportunity cost of producing 1 bushel of corn is

bushels of rye, whereas Janet's opportunity cost of producing 1 bushel of corn is

bushels of rye. Because Felix has a opportunity cost of producing corn than Janet, has a comparative advantage in the production of corn, and has a comparative advantage in the production of rye.