Question
Rajiv and Simone are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of corn and rye each farmer
Rajiv and Simone 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.
Rajiv Corn 20 Rye 4 (bushels per acre)
Simone Corn 28 Rye 7 (bushels per acre)
It then asks me to plot both of their Production Possibilities Frontier (PPF) and I'm having a hard time understand how to do it on the graph I'm given. Then I have to ask the following questions.
? has an absolute advantage in the production of corn, and ?has an absolute advantage in the production of rye.
Rajiv's opportunity cost of producing 1 bushel of rye is ? bushels of corn, whereas Simone's opportunity cost of producing 1 bushel of rye is ? bushels of corn.
Because Rajiv has a ? opportunity cost of producing rye than Simone, ? has a comparative advantage in the production of rye, and ? has a comparative advantage in the production of corn.
I'm not asking for answers to just be given to me I just desperately looking for an example like this with an explanation. By book has no examples and I don't want to cheat my googling it. I just need an explanation for steps to follow on plotting the graph and how to answer the questions.
Thank you for your time! :)
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