2. Comparative and absolute advantageSam and Teresa are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of corn and rye each farmer can produceper 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 onthe rest.CornRye(Bushels per acre)(Bushels per acre)Sam408Тeresa287On the following graph, use the blue line (circle symbol) to plot Sam's production possibilities frontier (PPF), and use the purple line (diamond symbol)to plot Teresa's PPF.200180Sam's PPF160140Teresa's PPF12010080604020100200 300400500 600700B00900 1000CORN (Bushels)has an absolute advantage in the production of corn, andhas an absolute advantage in the production of rye.Sam's opportunity cost of producing 1 bushel of rye isbushels of corn, whereas Teresa's opportunity cost of producing 1 bushel of rye isv opportunity cost of producing rye than Teresa,v has a comparativebushels of corn. Because Sam has aadvantage in the production of rye, andhas a comparative advantage in the production of corn.RYE (Busheis)

Opportunity cost can be said as the amount of benefit foregone for considering an alternative scope.…

2. Comparative and absolute advantage Sam and Teresa are farmers. Each one owns a 20-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 con or rye or to produce com on some of the land and rye on the rest. Corn Rye (Bushels per acre) (Bushels per acre) Sam 40 Teresa 28 On the following graph, use the blue line (circle symbal) to plot Sam's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Teresa's PPr. 200 180 Sam's PPF 160 140 120 Teresa's PPF 100 40 20 O 100 200 300 400 s00 o0 700 00 s0 1000 CORN (Bushels) has an absolute advantage in the production of com, and has an absolute advantage in the production of rye. Sam's opportunity cost of producing 1 bushel of rye is [ | bushels of corn, whereas Teresa's opportunity cost of producing 1 bushel of rye is bushels of con. Because Sam has a opportunity cost of producing rye than Teresa, as a comparative advantage in the production of rye, and has a comparative advantage in the production of corn. RYE (Busheis)

2. Comparative and absolute advantage Sam and Teresa are farmers. Each one owns a 20-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 con or rye or to produce com on some of the land and rye on the rest. Corn Rye (Bushels per acre) (Bushels per acre) Sam 40 Teresa 28 On the following graph, use the blue line (circle symbal) to plot Sam's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Teresa's PPr. 200 180 Sam's PPF 160 140 120 Teresa's PPF 100 40 20 O 100 200 300 400 s00 o0 700 00 s0 1000 CORN (Bushels) has an absolute advantage in the production of com, and has an absolute advantage in the production of rye. Sam's opportunity cost of producing 1 bushel of rye is [ | bushels of corn, whereas Teresa's opportunity cost of producing 1 bushel of rye is bushels of con. Because Sam has a opportunity cost of producing rye than Teresa, as a comparative advantage in the production of rye, and has a comparative advantage in the production of corn. RYE (Busheis)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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