Question
I have put in bold lettering the options and question marks for the answers that I need to understand in the below scenario. Dmitri and
I have put in bold lettering the options and question marks for the answers that I need to understand in the below scenario.
Dmitri and Frances are farmers. Each one owns a 20-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 (bushels per acre) Rye (Bushels per acre)
Dmitri 10 5
Frances 40 8
(Frances or Dmitri) has an absolute advantage in the production of corn, and (Frances or Dmitri) has an absolute advantage in the production of rye.
Dmitri's opportunity cost of producing 1 bushel of rye is ? bushels of corn, whereas Frances's opportunity cost of producing 1 bushel of rye is ? bushels of corn. Because Dmitri has a (higher or lower) opportunity cost of producing rye than Frances, (Frances or Dmitri) has a comparative advantage in the production of rye, and (Frances or Dmitri) has a comparative advantage in the production of corn.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started