Charles and Dina are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of the land and alfalfa on the rest.

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Chapter1: Making Economics Decisions
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2. Comparative and absolute advantage
Charles and Dina are farmers. Each one owns a 20-acre plot of land. The following table shows the
amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer
chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of
the land and alfalfa on the rest.
ALFALFA (Bushels)
Charles
Dina
On the following graph, use the blue line (circle symbol) to plot Charles's production possibilities
frontier (PPF), and use the purple line (diamond symbol) to plot Dina's PPF.
?
200
180
160
140
120
100
80
60
40
20
0
0
V
Barley
Alfalfa
(Bushels per acre) (Bushels per acre)
9
18
40
8
100 200
300 400 500 600 700 800 900 1000
BARLEY (Bushels)
Charles's PPF
Dina's PPF
Dina has an absolute advantage in the production of barley, and Charles has an absolute
advantage in the production of alfalfa.
Charles's opportunity cost of producing 1 bushel of alfalfa is
Dina's opportunity cost of producing 1 bushel of alfalfa is
has a
opportunity cost of producing alfalfa than Dina,
advantage in the production of alfalfa, and
production of barley.
bushels of barley, whereas
bushels of barley. Because Charles
has a comparative
has a comparative advantage in the
Transcribed Image Text:2. Comparative and absolute advantage Charles and Dina are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of the land and alfalfa on the rest. ALFALFA (Bushels) Charles Dina On the following graph, use the blue line (circle symbol) to plot Charles's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Dina's PPF. ? 200 180 160 140 120 100 80 60 40 20 0 0 V Barley Alfalfa (Bushels per acre) (Bushels per acre) 9 18 40 8 100 200 300 400 500 600 700 800 900 1000 BARLEY (Bushels) Charles's PPF Dina's PPF Dina has an absolute advantage in the production of barley, and Charles has an absolute advantage in the production of alfalfa. Charles's opportunity cost of producing 1 bushel of alfalfa is Dina's opportunity cost of producing 1 bushel of alfalfa is has a opportunity cost of producing alfalfa than Dina, advantage in the production of alfalfa, and production of barley. bushels of barley, whereas bushels of barley. Because Charles has a comparative has a comparative advantage in the
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