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Comparative and absolute advantage Sam and Teresa are farmers Each one owns a 20-acre plot of land The following table shows

Comparative and absolute advantage Sam and Teresa 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) Sam 18 9 Teresa 40 8 *On a graph, use the blue line to plot Sam's production possibilities frontier (PPF), and use the purple line to plot Teresa's PPF. ???has an absolute advantage in the production of rye, and ???has an absolute advantage in the production of corn. Sam's opportunity cost of producing 1 bushel of corn is ???bushels of rye, whereas Teresa's opportunity cost of producing 1 bushel of corn is ??? bushels of rye. Because Sam has a ??? opportunity cost of producing corn than Teresa, ??? has a comparative advantage in the production of corn, and??? has a comparative advantage in the production of rye.

Apr 30 2020 View more View Less

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