6. Comparative and absolute advantageElijah and Aneesha are farmers. Each one owns a 16-acre plot of land. The following table showsthe amount of watermelon and zucchini each farmer can produce per year on a given acre. Eachfarmer chooses whether to devote all acres to producing watermelon or zucchini or to producewatermelon on some of the land and zucchini on the rest.ZUCCHINI (Pounds)160ElijahAneeshaOn the following graph, use the blue line (circle symbol) to plot Elijah's production possibilitiesfrontier (PPF), and use the purple line (diamond symbol) to plot Aneesha's PPF.1441281129680644832160WatermelonZucchini(Pounds per acre) (Pounds per acre)505880 160 240 320 400 480 560WATERMELON (Pounds)4+H640 720 800Elijah's PPFAneesha's PPF(?)has an absolute advantage in the production of watermelon, andabsolute advantage in the production of zucchini.Elijah's opportunity cost of producing 1 pound of zucchini isAneesha's opportunity cost of producing 1 pound of zucchini isBecause Elijah has aopportunity cost of producing zucchinia comparative advantage in the production of zucchini, andadvantage in the production of watermelon.▼has anpounds of watermelon, whereaspounds of watermelon.than Aneesha,has a comparativehas

Identifying Absolute Advantage: This is based on who can create more of a good with the same…

has an absolute advantage in the production of watermelon, and absolute advantage in the production of zucchini. Elijah's opportunity cost of producing 1 pound of zucchini is Aneesha's opportunity cost of producing 1 pound of zucchini is Because Elijah has a a comparative advantage in the production of zucchini, and advantage in the production of watermelon. has an pounds of watermelon, whereas pounds of watermelon. opportunity cost of producing zucchini than Aneesha, has a comparative has

has an absolute advantage in the production of watermelon, and absolute advantage in the production of zucchini. Elijah's opportunity cost of producing 1 pound of zucchini is Aneesha's opportunity cost of producing 1 pound of zucchini is Because Elijah has a a comparative advantage in the production of zucchini, and advantage in the production of watermelon. has an pounds of watermelon, whereas pounds of watermelon. opportunity cost of producing zucchini than Aneesha, has a comparative has

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

6. Comparative and absolute advantage
Elijah and Aneesha are farmers. Each one owns a 16-acre plot of land. The following table shows
the amount of watermelon and zucchini each farmer can produce per year on a given acre. Each
farmer chooses whether to devote all acres to producing watermelon or zucchini or to produce
watermelon on some of the land and zucchini on the rest.
ZUCCHINI (Pounds)
160
Elijah
Aneesha
On the following graph, use the blue line (circle symbol) to plot Elijah's production possibilities
frontier (PPF), and use the purple line (diamond symbol) to plot Aneesha's PPF.
144
128
112
96
80
64
48
32
16
0
Watermelon
Zucchini
(Pounds per acre) (Pounds per acre)
5
0
5
8
80 160 240 320 400 480 560
WATERMELON (Pounds)
4
+
H
640 720 800
Elijah's PPF
Aneesha's PPF
(?)
has an absolute advantage in the production of watermelon, and
absolute advantage in the production of zucchini.
Elijah's opportunity cost of producing 1 pound of zucchini is
Aneesha's opportunity cost of producing 1 pound of zucchini is
Because Elijah has a
opportunity cost of producing zucchini
a comparative advantage in the production of zucchini, and
advantage in the production of watermelon.
▼
has an
pounds of watermelon, whereas
pounds of watermelon.
than Aneesha,
has a comparative
has

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