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2. Comparative and absolute advantage Sean and Yvette 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. Sean Yvette Corn (Bushels per acre) 10 40 Rye (Bushels per acre) 5 8

On the following graph, use the blue line (circle symbol) to plot Sean's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Yvette's PPF. RYE (Bushels) 200 180 160 140 120 100 80 60 40 20 0 0 100 200 300 400 500 600 CORN (Bushels) 700 800 900 1000 Sean's PPF Yvette's PPF ?

has an absolute advantage in the production of corn, and Sean's opportunity cost of producing 1 bushel of rye is bushels of corn. Because Sean has a in the production of rye, and has a comparative has an absolute advantage in the production of rye. bushels of corn, whereas Yvette's opportunity cost of producing 1 bushel of rye is opportunity cost of producing rye than Yvette, has a comparative advantage advantage in the production of corn. Grade It Now Save & Continue Continue without saving