Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Comparative and absolute advantage Gilberto and Juanita are farmers. Each one owns a 16-acre plot of land. The following table shows the amount of

2. Comparative and absolute advantage Gilberto and Juanita are farmers. Each one owns a 16-acre plot of land. The following table shows the amount of alfalfa and barley each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing alfalfa or barley or to produce alfalfa on some of the land and barley on the rest. Alfalfa Barley Gilberto Juanita (Bushels per acre) (Bushels per acre) 28 18 7 6 has an absolute advantage in the production of alfalfa, and Gilberto's opportunity cost of producing 1 bushel of barley is barley is bushels of alfalfa. Because Gilberto has a comparative advantage in the production of barley, and has an absolute advantage in the production of barley. bushels of alfalfa, whereas Juanita's opportunity cost of producing 1 bushel of opportunity cost of producing barley than Juanita, has a has a comparative advantage in the production of alfalfa

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

Simplifying Finance And Accounting Function

Authors: Mr. Dauji Gupta

1st Edition

9353467276, 978-9353467272

More Books

Students also viewed these Accounting questions

Question

e. What difficulties did they encounter?

Answered: 1 week ago