1. Comparative and absolute advantage Andrew and Beth each own a a 26-acre farm. The table below dispalys the production capacity for kale and asparagus on an acre of their land. Both farmers must decide how to allocate their acres between kale and asparagus to maximize their yields. Andrew Beth Kale Asparagus (Crates per acre) (Crates per acre) 28 18 7 6 On the following graph, use the blue line (circle symbol) to plot Andrew's production possibilities curve (PPC) and use the purple line (diamond symbol) to plot Beth's PPC. Then, use the graph to answer the questions that follow. ASPARAGUS (Crates) 260 234 208 182 156 130 104 78 52 26 0 0 130 260 390 520 650 780 910 1040 1170 1300 KALE (Crates) Andrew's PPC Beth's PPC ? has an absolute advantage in the production of kale, while Andrew's opportunity cost of producing 1 crate of asparagus is asparagus is crates of kale. Because Andrew has a comparative advantage in the production of asparagus, and possesses an absolute advantage in producingasparagus. crates of kale, whereas Beth's opportunity cost of producing 1 crate of opportunity cost of producing asparagus than Beth,, has a comparative advantage in the production of kale. has a Grade It Now Save & Continue Continue without saving
1. Comparative and absolute advantage Andrew and Beth each own a a 26-acre farm. The table below dispalys the production capacity for kale and asparagus on an acre of their land. Both farmers must decide how to allocate their acres between kale and asparagus to maximize their yields. Andrew Beth Kale Asparagus (Crates per acre) (Crates per acre) 28 18 7 6 On the following graph, use the blue line (circle symbol) to plot Andrew's production possibilities curve (PPC) and use the purple line (diamond symbol) to plot Beth's PPC. Then, use the graph to answer the questions that follow. ASPARAGUS (Crates) 260 234 208 182 156 130 104 78 52 26 0 0 130 260 390 520 650 780 910 1040 1170 1300 KALE (Crates) Andrew's PPC Beth's PPC ? has an absolute advantage in the production of kale, while Andrew's opportunity cost of producing 1 crate of asparagus is asparagus is crates of kale. Because Andrew has a comparative advantage in the production of asparagus, and possesses an absolute advantage in producingasparagus. crates of kale, whereas Beth's opportunity cost of producing 1 crate of opportunity cost of producing asparagus than Beth,, has a comparative advantage in the production of kale. has a Grade It Now Save & Continue Continue without saving
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter3: Interdependence And The Gains Rrom Trade
Section: Chapter Questions
Problem 6PA
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Transcribed Image Text:1. Comparative and absolute advantage
Andrew and Beth each own a a 26-acre farm. The table below dispalys the production capacity for kale and asparagus on an acre of their land. Both
farmers must decide how to allocate their acres between kale and asparagus to maximize their yields.
Andrew
Beth
Kale
Asparagus
(Crates per acre) (Crates per acre)
28
18
7
6
On the following graph, use the blue line (circle symbol) to plot Andrew's production possibilities curve (PPC) and use the purple line (diamond
symbol) to plot Beth's PPC. Then, use the graph to answer the questions that follow.
ASPARAGUS (Crates)
260
234
208
182
156
130
104
78
52
26
0
0
130 260 390
520 650 780 910
1040 1170 1300
KALE (Crates)
Andrew's PPC
Beth's PPC
?
has an absolute advantage in the production of kale, while
Andrew's opportunity cost of producing 1 crate of asparagus is
asparagus is
crates of kale. Because Andrew has a
comparative advantage in the production of asparagus, and
possesses an absolute advantage in producingasparagus.
crates of kale, whereas Beth's opportunity cost of producing 1 crate of
opportunity cost of producing asparagus than Beth,,
has a comparative advantage in the production of kale.
has a
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