2. Comparative and absolute advantage Gilberto and Juanita are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of rye and corn each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing rye or corn or to produce rye on some of the land and com on the rest. Rye Corn (Bushels per acre) (Bushels per acre) Gilberto 12 Juanita 18 On the following graph, use the blue line (circle symbol) to plot Gilberto's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Juanita's PPF. 120 108 Gilberto's PPF 96 84 72 Juanita's PPF 60 48 36 24 12 60 120 180 240 300 360 420 480 540 600 RYE (Bushels) has an absolute advantage in the production of rye, and has an absolute advantage in the production of corn. Gilberto's opportunity cost of producing 1 bushel of corn is | bushels of rye. Because Gilberto has a |bushels of rye, whereas Juanita's opportunity cost of producing 1 bushel of corn is opportunity cost of producing corn than Juanita, has a comparative advantage in the production of corn, and has a comparative advantage in the production of rye. CORN (Bushels)

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2. Comparative and absolute advantage
Gilberto and Juanita are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of rye and corn each farmer can
produce per year on a given acre. Each farmer chooses whether to devote all acres to producing rye or corn or to produce rye on some of the land and
com on the rest.
Rye
Corn
(Bushels per acre) (Bushels per acre)
Gilberto
12
Juanita
18
On the following graph, use the blue line (circle symbol) to plot Gilberto's production possibilities frontier (PPF), and use the purple line (diamond
symbol) to plot Juanita's PPF.
120
108
Gilberto's PPF
96
84
72
Juanita's PPF
60
48
36
24
12
60
120
180 240 300 360 420
480
540 600
RYE (Bushels)
- has an absolute advantage in the production of rye, and
v has an absolute advantage in the production of corn.
Gilberto's opportunity cost of producing 1 bushel of corn is
bushels of rye, whereas Juanita's opportunity cost of producing 1 bushel of corn
is
bushels of rye. Because Gilberto has a
opportunity cost of producing corn than Juanita,
v has a comparative
advantage in the production of corn, and
v has a comparative advantage in the production of rye.
(sjausng) NaC
Transcribed Image Text:2. Comparative and absolute advantage Gilberto and Juanita are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of rye and corn each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing rye or corn or to produce rye on some of the land and com on the rest. Rye Corn (Bushels per acre) (Bushels per acre) Gilberto 12 Juanita 18 On the following graph, use the blue line (circle symbol) to plot Gilberto's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Juanita's PPF. 120 108 Gilberto's PPF 96 84 72 Juanita's PPF 60 48 36 24 12 60 120 180 240 300 360 420 480 540 600 RYE (Bushels) - has an absolute advantage in the production of rye, and v has an absolute advantage in the production of corn. Gilberto's opportunity cost of producing 1 bushel of corn is bushels of rye, whereas Juanita's opportunity cost of producing 1 bushel of corn is bushels of rye. Because Gilberto has a opportunity cost of producing corn than Juanita, v has a comparative advantage in the production of corn, and v has a comparative advantage in the production of rye. (sjausng) NaC
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