Comparative and absolute advantage Bob and Cho are farmers. Each one owns a 16-a

Question

Comparative and absolute advantage Bob and Cho are farmers. Each one owns a 16-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 their land and rye on the rest. On the following graph, use the blue line (circle symbol) to plot Bob's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Cho's PPF. has an absolute advantage in the production of corn, and has an absolute advantage in the production of rye. Bob's opportunity cost of producing 1 bushel of rye is bushels of corn whereas Cho's opportunity cost of producing 1 busher of rye is Because Bob has a bushels of corn whereas Cho's opportunity cost of producing 1 bushel of rye is opportunity cost of producing rye than Cho's has a comparative advantage in the production of rye, and has a comparative advantage in the production of corn.

Explanation / Answer

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Bob has an absolute advantage in the production of corn,and Bob has an absolute advantage in the production of rye.

Bob's opportunity cost of producing 1 bushel of rye is 3 bushels of corn whereas Cho's opportunity cost of producing 1 bushel of rye is 5 bushel of corn.Because Bob has a low opportunity cost of producing rye than Cho,Bob has a comparative advantage in the production of rye,and Cho has a comparative advantage in the production of corn.

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