2. Comparative and absolute advantage Shen and Valerie are farmers. Each one owns an 18-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 corn on the rest. Shen Valerie CORN (Bushels) On the following graph, use the blue line (circle symbol) to plot Shen's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Valerie's PPF. 180 162 144 126 108 90 72 54 36 18 0 Rye Corn (Bushels per acre) (Bushels per acre) 50 10 6 3 0 90 180 270 360 450 540 630 720 810 900 RYE (Bushels) has an absolute advantage in the production of rye, and Shen's opportunity cost of producing 1 bushel of corn is bushels of rye. Because Shen has a advantage in the production of corn, and Shen's PPF Valerie's PPF ? has an absolute advantage in the production of corn. bushels of rye, whereas Valerie's opportunity cost of producing 1 bushel of corn is ▾ opportunity cost of producing corn than Valerie, has a comparative has a comparative advantage in the production of rye.

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