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Lorenzo and Neha are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of corn and rye each farmer

Lorenzo and Neha 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 per acre) (Bushels per acre)
Lorenzo 20 4
Neha 28 7

On the following graph, use the blue line (circle symbol) to plot Lorenzo's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Neha's PPF.

Lorenzo's PPFNeha's PPF06012018024030036042048054060012010896847260483624120RYE (Bushels)CORN (Bushels)

has an absolute advantage in the production of corn, and has an absolute advantage in the production of rye.

Lorenzo's opportunity cost of producing 1 bushel of rye is

bushels of corn, whereas Neha's opportunity cost of producing 1 bushel of rye is

bushels of corn. Because Lorenzo has a opportunity cost of producing rye than Neha, has a comparative advantage in the production of rye, and has a comparative advantage in the production of corn.

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