2. Comparative and absolute advantageJake and Latasha are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of barley and alfalfa each farmer canproduce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of theland and alfalfa on the rest.BarleyAlfalfa(Bushels per acre)(Bushels per acre)Jake40Latasha287On the following graph, use the blue line (circle symbol) to plot Jake's production possibilities frontier (PPF), and use the purple line (diamond symbol)to plot Latasha's PPF.120108Jake's PPF30°F Clear 120501108Jake's PPF968472Latasha's PPF604836241260120180240300380420480540600BARLEY (Bushels)has an absolute advantage in the production of barley, andhas an absolute advantage in the production of alfalfa.Jake's opportunity cost of producing 1 bushel of alfalfa isbushels of barley, whereas Latasha's opportunity cost of producing 1 bushel ofhas aalfalfa isbushels of barley. Because Jake has aopportunity cost of producing alfalfa than Latasha,has a comparative advantage in the production of barley.comparative advantage in the production of alfalfa, and30°F ClearALFALFA (Bushels)

Jake's can produce either 40 bushels of barley or 8 bushels of Alfalfa per acre of land Latasha can…

nd and alfalfa on the rest. Barley Alfalfa (Bushels per acre) (Bushels per acre) Jake 40 8. Latasha 28 7 n the following graph, use the blue line (circle symbol) to plot Jake's production possibilities frontier (PPF), and use the purple line (diamond symbol o plot Latasha's PPF.

nd and alfalfa on the rest. Barley Alfalfa (Bushels per acre) (Bushels per acre) Jake 40 8. Latasha 28 7 n the following graph, use the blue line (circle symbol) to plot Jake's production possibilities frontier (PPF), and use the purple line (diamond symbol o plot Latasha's PPF.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Welfare Analysis

Welfare analysis of the society is related to welfare economics. From the economic point of view former welfare economics refers to that subject which uses the techniques of microeconomics to analyse and evaluate the welfare at the economic or aggregate level.

Question

2. Comparative and absolute advantage
Jake and Latasha are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can
produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of the
land and alfalfa on the rest.
Barley
Alfalfa
(Bushels per acre)
(Bushels per acre)
Jake
40
Latasha
28
7
On the following graph, use the blue line (circle symbol) to plot Jake's production possibilities frontier (PPF), and use the purple line (diamond symbol)
to plot Latasha's PPF.
120
108
Jake's PPF
30°F Clear

120
501
108
Jake's PPF
96
84
72
Latasha's PPF
60
48
36
24
12
60
120
180
240
300
380
420
480
540
600
BARLEY (Bushels)
has an absolute advantage in the production of barley, and
has an absolute advantage in the production of alfalfa.
Jake's opportunity cost of producing 1 bushel of alfalfa is
bushels of barley, whereas Latasha's opportunity cost of producing 1 bushel of
has a
alfalfa is
bushels of barley. Because Jake has a
opportunity cost of producing alfalfa than Latasha,
has a comparative advantage in the production of barley.
comparative advantage in the production of alfalfa, and
30°F Clear
ALFALFA (Bushels)

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