Suppose that market prices were such that 35 apples could be bought for 1 tonne of wheat.

1. If Greta sold 16 tonnes of wheat, would both she and Carlos still be better off?
2. What would happen if only 20 apples could be bought for the price of a tonne of wheat?

tonnes per annum. Carlos has less fertile land than Greta for producing both crops: if he devoted all his time (the same amount as Greta) to apple growing, he would produce 1,000 per year, and if he produced only wheat he would produce 20 tonnes. See Figure 1.9a for a summary. Production if 100% of time is spent on one good Greta 1,250 apples or 50 tonnes of wheat Carlos 1,000 apples or 20 tonnes of wheat Figure 1.9a Absolute and comparative advantage in the production of apples and wheat. Although Carlos' land is worse for producing both crops, his disadvantage is less, relative to Greta, in apples than in wheat. Greta can produce two and a half times more wheat as he can but only 25% more apples. 23 tv WE