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Use the following table to answer the question below. Jake's Production Possibilities Schedule Pounds of Green Beans Pounds of Corn 160 120 O 10 20 30 40 80 40 0 Who has the comparative advantage in the production of corn? Jane's Production Possibilities Schedule Pounds of Green Beans Pounds of Corn 80 60 40 20 0 0 20 40 60 80

Use the following table to answer the question below. Jake's Production Possibilities Schedule Pounds of Green Beans Pounds of Corn 160 120 O 10 20 30 40 80 40 0 Who has the comparative advantage in the production of corn? Jane's Production Possibilities Schedule Pounds of Green Beans Pounds of Corn 80 60 40 20 0 0 20 40 60 80

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Jake's and Jane's Production Possibilities Schedule** To understand comparative advantage, refer to the following table that outlines Jake's and Jane's production possibilities. It displays the trade-off between producing pounds of green beans and pounds of corn for each individual. | **Jake's Production Possibilities Schedule** | | **Jane's Production Possibilities Schedule** | |----------------------------------------------|------|--------------------------------------------------| | **Pounds of Green Beans** | **Pounds of Corn** | **Pounds of Green Beans** | **Pounds of Corn** | | 0 | 160 | 0 | 80 | | 10 | 120 | 20 | 60 | | 20 | 80 | 40 | 40 | | 30 | 40 | 60 | 20 | | 40 | 0 | 80 | 0 | **Question**: Who has the comparative advantage in the production of corn? **Explanation**: - The table above represents the different combinations of green beans and corn that Jake and Jane can produce using all of their available resources. - To determine who has the comparative advantage in the production of corn, we need to compare their opportunity costs of producing corn. - For Jake: Moving from 0 to 10 pounds of green beans results in a decrease in corn production from 160 to 120 pounds, implying an opportunity cost of 4 pounds of corn for 1 pound of green beans. - For Jane: Moving from 0 to 20 pounds of green beans results in a decrease in corn production from 80 to 60 pounds, implying an opportunity cost of 1 pound of corn for 1 pound of green beans. **Conclusion**: - Jane has the lower opportunity cost of producing corn compared to Jake and thus has the comparative advantage in the production of corn.
Transcribed Image Text:**Jake's and Jane's Production Possibilities Schedule** To understand comparative advantage, refer to the following table that outlines Jake's and Jane's production possibilities. It displays the trade-off between producing pounds of green beans and pounds of corn for each individual. | **Jake's Production Possibilities Schedule** | | **Jane's Production Possibilities Schedule** | |----------------------------------------------|------|--------------------------------------------------| | **Pounds of Green Beans** | **Pounds of Corn** | **Pounds of Green Beans** | **Pounds of Corn** | | 0 | 160 | 0 | 80 | | 10 | 120 | 20 | 60 | | 20 | 80 | 40 | 40 | | 30 | 40 | 60 | 20 | | 40 | 0 | 80 | 0 | **Question**: Who has the comparative advantage in the production of corn? **Explanation**: - The table above represents the different combinations of green beans and corn that Jake and Jane can produce using all of their available resources. - To determine who has the comparative advantage in the production of corn, we need to compare their opportunity costs of producing corn. - For Jake: Moving from 0 to 10 pounds of green beans results in a decrease in corn production from 160 to 120 pounds, implying an opportunity cost of 4 pounds of corn for 1 pound of green beans. - For Jane: Moving from 0 to 20 pounds of green beans results in a decrease in corn production from 80 to 60 pounds, implying an opportunity cost of 1 pound of corn for 1 pound of green beans. **Conclusion**: - Jane has the lower opportunity cost of producing corn compared to Jake and thus has the comparative advantage in the production of corn.
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