Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 33, Problem 2.3P
Subpart (a):
To determine
The
Subpart (b):
To determine
The transfer of land and sacrifice.
Subpart (c):
To determine
The
Subpart (d):
To determine
The consistency with the data.
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2. Comparative and absolute advantage
Larry and Megan are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of corn and rye each farmer can produce
per year on a given acre. Each farmer chooses whether to devote all acres to producing corn or rye or to produce corn on some of the land and rye on
the rest.
Corn
Rye
(Bushels per acre) (Bushels per acre)
Larry
40
8
Megan
28
7
On the following graph, use the blue line (circle symbol) to plot Larry's production possibilities frontier (PPF), and use the purple line (diamond
symbol) to plot Megan's PPF.
(?)
200
180
160
140
120
100
80
60
40
20
0
has an absolute advantage in the production of rye.
bushels of corn, whereas Megan's opportunity cost of producing 1 bushel of rye is
opportunity cost of producing rye than Megan,
has a comparative
has a comparative advantage in the production of corn.
RYE (Bushels)
0
100 200 300
400 500 600 700 800 900 1000
CORN (Bushels)
has an absolute advantage in the production of…
2. Comparative and absolute advantage
Felix and Janet are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of rye and corn each farmer can produce per
year on a given acre. Each farmer chooses whether to devote all acres to producing rye or corn or to produce rye on some of the land and corn on the
rest.
Rye
Corn
(Bushels per acre) (Bushels per acre)
Felix
40
8
Janet
28
7
On the following graph, use the blue line (circle symbol) to plot Felix's production possibilities frontier (PPF), and use the purple line (diamond symbol)
to plot Janet's PPF.
(?)
200
180
160
140
120
100
80
60
40
20
0
0 100 200 300
400 500 600 700 800 900 1000
RYE (Bushels)
Felix has an absolute advantage in the production of rye, and Felix has an absolute advantage in the production of corn.
Felix's opportunity cost of producing 1 bushel of corn is
bushels of rye, whereas Janet's opportunity cost of producing 1 bushel of corn is
bushels of rye. Because Felix has a higher…
Comparative and absolute advantage Elijah and Aneesha are farmers. Each one owns an 18-acre plot of land. The following table shows the amount of squash and maize each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing squash or maize or to produce squash on some of the land and maize on the rest. Squash Maize (Pounds per acre) (Pounds per acre) Elijah 12 3 Aneesha 18 6 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. Elijah's PPF Aneesha's PPF 0 90 180 270 360 450 540 630 720 810 900 180 162 144
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Chapter 33 Solutions
Principles of Economics (12th Edition)
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