2. Comparative and absolute advantageCharles and Dina are farmers. Each one owns a 20-acre plot of land. The following table shows theamount of barley and alfalfa each farmer can produce per year on a given acre. Each farmerchooses whether to devote all acres to producing barley or alfalfa or to produce barley on some ofthe land and alfalfa on the rest.ALFALFA (Bushels)CharlesDinaOn the following graph, use the blue line (circle symbol) to plot Charles's production possibilitiesfrontier (PPF), and use the purple line (diamond symbol) to plot Dina's PPF.?2001801601401201008060402000VBarleyAlfalfa(Bushels per acre) (Bushels per acre)918408100 200300 400 500 600 700 800 900 1000BARLEY (Bushels)Charles's PPFDina's PPFDina has an absolute advantage in the production of barley, and Charles has an absoluteadvantage in the production of alfalfa.Charles's opportunity cost of producing 1 bushel of alfalfa isDina's opportunity cost of producing 1 bushel of alfalfa ishas aopportunity cost of producing alfalfa than Dina,advantage in the production of alfalfa, andproduction of barley.bushels of barley, whereasbushels of barley. Because Charleshas a comparativehas a comparative advantage in the

There are two farmers; Charles and Dina. Each farmer has two goods; Barley and Alfalfa.Each farmer…

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.

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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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