Question
Eric and Ginny are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of corn and rye each farmer
Eric and Ginny 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.
Corn Rye
Bushels/acre Bushels/acre
Eric 20 4
Ginny 28 7
Who has the absolute advantage in the production of corn, and who has the absolute advantage in the production of rye? What is Eric's opportunity cost of producing 1 bushel of rye in relation to bushels of corn, whereas Ginney's opportunity cost of producing 1 bushel of rye is how many bushels of corn? Does Eric have a lower opportunity cost of producing rye than Ginny? Does Eric has a comparative advantage in the production of rye and Ginny have a comparative advantage in the production of corn?
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