2. Comparative and absolute advantage Tim and Alyssa are farmers. Each one owns a 12-acre plot...
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2. Comparative and absolute advantage Tim and Alyssa 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. Tim Alyssa Corn Rye (Bushels per acre) (Bushels per acre) 12 3 18 6 On the following graph, use the blue line (circle symbol) to plot Tim's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Alyssa's PPF. RYE (Bushels) 120 108 96 84 72 60 48 36 24 12 0 0 60 120 180 240 300 360 CORN (Bushels) 420 480 540 600 Tim's PPF Alyssa's PPF ? has an absolute advantage in the production of corn, and Tim's opportunity cost of producing 1 bushel of rye is bushels of corn. Because Tim has a in the production of rye, and has an absolute advantage in the production of rye. bushels of corn, whereas Alyssa's opportunity cost of producing 1 bushel of rye is opportunity cost of producing rye than Alyssa, has a comparative advantage has a comparative advantage in the production of corn. Grade It Now Save & Continue Continue without saving 2. Comparative and absolute advantage Tim and Alyssa 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. Tim Alyssa Corn Rye (Bushels per acre) (Bushels per acre) 12 3 18 6 On the following graph, use the blue line (circle symbol) to plot Tim's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Alyssa's PPF. RYE (Bushels) 120 108 96 84 72 60 48 36 24 12 0 0 60 120 180 240 300 360 CORN (Bushels) 420 480 540 600 Tim's PPF Alyssa's PPF ? has an absolute advantage in the production of corn, and Tim's opportunity cost of producing 1 bushel of rye is bushels of corn. Because Tim has a in the production of rye, and has an absolute advantage in the production of rye. bushels of corn, whereas Alyssa's opportunity cost of producing 1 bushel of rye is opportunity cost of producing rye than Alyssa, has a comparative advantage has a comparative advantage in the production of corn. Grade It Now Save & Continue Continue without saving
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Related Book For
Microeconomics
ISBN: 978-0321866349
14th canadian Edition
Authors: Christopher T.S. Ragan, Richard G Lipsey
Posted Date:
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