Answered: Antonio and Caroline are farmers. Each…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Antonio and Caroline are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of alfalfa and barley each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing alfalfa or barley or to produce alfalfa on some of the land and barley on the rest.

	Alfalfa	Barley
(Bushels per acre)	(Bushels per acre)
Antonio	40	8
Caroline	28	7

___________has an absolute advantage in the production of alfalfa, and __________ has an absolute advantage in the production of barley.

Antonio's opportunity cost of producing 1 bushel of barley is ____

bushels of alfalfa, whereas Caroline's opportunity cost of producing 1 bushel of barley is______

bushels of alfalfa. Because Antonio has a ______ opportunity cost of producing barley than Caroline,________ has a comparative advantage in the production of barley and_______ has a comparative advantage in the production of alfalfa.

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