Comparative and absolute advantage

Larry and Megan are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of corn and rye each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing corn or rye or to produce corn on some of the land and rye on the rest

1) On the following graph, plot Larry's production possibilities frontier (PPF), and to plot Megan's PPF.

2) (Megan, Larry) ..................... has an absolute advantage in the production of corn, and (Megan, Larry) ............ has an absolute advantage in the production of rye.

3) Larry's opportunity cost of producing 1 bushel of rye is ......... bushels of corn, whereas Megan's opportunity cost of producing 1 bushel of rye is ......... bushels of corn.

4) Because Larry has a ........... (higher, Lower) opportunity cost of producing rye than Megan, .............. (Larry, Megan) has a comparative advantage in the production of rye, and ......... (Larry, Megan) has a comparative advantage in the production of corn.

Corn (Bushels per acre) 20 28 Rye (Bushels per acre) 4 7 Larry Megan