Question
. Comparative and absolute advantage Brian and Crystal are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of
. Comparative and absolute advantage
Brian and Crystal 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) | |
Brian | 30 | 10 |
Crystal | 28 | 7 |
On the following graph, use the blue line (circle symbol) to plot Brian's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Crystal's PPF.
Brian's PPFCrystal's PPF01002003004005006007008009001000200180160140120100806040200CORN (Bushels)RYE (Bushels)
has an absolute advantage in the production of rye, and has an absolute advantage in the production of corn.
Brian's opportunity cost of producing 1 bushel of corn is
bushels of rye, whereas Crystal's opportunity cost of producing 1 bushel of corn is
bushels of rye. Because Brian has a opportunity cost of producing corn than Crystal, has a comparative advantage in the production of corn, and has a comparative advantage in the production of rye
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