?--2. Comparative and absolute advantageLoc and Ashima are farmers. Each one owns an 18-acre plot of land. The following table shows the amount of maize and squash each farmer canproduce per year on a given acre. Each farmer chooses whether to devote all acres to producing maize or squash or to produce maize on some of theland and squash on the rest.LocSQUASH (Pounds)AshimaOn the following graph, use the blue line (circle symbol) to plot Loc's production possibilities frontier (PPF), and use the purple line (diamond symbol)to plot Ashima's PPF.180162144126382 382010854180MaizeSquash(Pounds per acre) (Pounds per acre)829990100 270360 450 540MAIZE (Pounds)630 720 010 9005has an absolute advantage in the production of maize, andLoc's opportunity cost of producing 1 pound of squash ispounds of maize. Because Loc has asquash iscomparative advantage in the production of squash, and10Loc's PPF1Ashima's PPF(?)has an absolute advantage in the production of squash.pounds of maize, whereas Ashima's opportunity cost of producing 1 pound ofopportunity cost of producing squash than Ashima,has ahas a comparative advantage in the production of maize.

A production possibility frontier (PPF) is a graphical representation showing the potential output…

SQUASH (Pounds) 2. Comparative and absolute advantage Loc and Ashima are farmers. Each one owns an 18-acre plot of land. The following table shows the amount of maize and squash each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing maize or squash or to produce maize on some of the land and squash on the rest. Maize Squash Loc Ashima (Pounds per acre) (Pounds per acre) 8 9 2 9 On the following graph, use the blue line (circle symbol) to plot Loc's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Ashima's PPF 180 162 144 126 108 72 54 38 18 0 90 0 100 270 360 450 720 540 630 MAIZE (Pounds) 010 900 Loc's PPF * Ashima's PPF ? has an absolute advantage in the production of maize, and Loc's opportunity cost of producing 1 pound of squash is pounds of maize. Because Loc has a squash is comparative advantage in the production of squash, and has an absolute advantage in the production of squash. pounds of maize, whereas Ashima's opportunity cost of producing 1 pound of opportunity cost of producing squash than Ashima, has a comparative advantage in the production of maize. has a

SQUASH (Pounds) 2. Comparative and absolute advantage Loc and Ashima are farmers. Each one owns an 18-acre plot of land. The following table shows the amount of maize and squash each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing maize or squash or to produce maize on some of the land and squash on the rest. Maize Squash Loc Ashima (Pounds per acre) (Pounds per acre) 8 9 2 9 On the following graph, use the blue line (circle symbol) to plot Loc's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Ashima's PPF 180 162 144 126 108 72 54 38 18 0 90 0 100 270 360 450 720 540 630 MAIZE (Pounds) 010 900 Loc's PPF * Ashima's PPF ? has an absolute advantage in the production of maize, and Loc's opportunity cost of producing 1 pound of squash is pounds of maize. Because Loc has a squash is comparative advantage in the production of squash, and has an absolute advantage in the production of squash. pounds of maize, whereas Ashima's opportunity cost of producing 1 pound of opportunity cost of producing squash than Ashima, has a comparative advantage in the production of maize. has a

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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50D- 50D- If the price of 1 tonne of wheat was 20 apples, who would benefit from trade? If the price was 1 tonne of wheat for 40 apples, who would benefit from trade?
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