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has an absolute advantage in the production of alfalfa, and has an absolute advantage in the production of barley. bushels of alfalfa, whereas Ginny's opportunity cost of producing 1 bushel of Eric's opportunity cost of producing 1 bushel of barley is barley is bushels of alfalfa. Because Eric has a v opportunity cost of producing barley than Ginny, v has a comparative advantage in the production of barley, and has a comparative advantage in the production of alfalfa.

has an absolute advantage in the production of alfalfa, and has an absolute advantage in the production of barley. bushels of alfalfa, whereas Ginny's opportunity cost of producing 1 bushel of Eric's opportunity cost of producing 1 bushel of barley is barley is bushels of alfalfa. Because Eric has a v opportunity cost of producing barley than Ginny, v has a comparative advantage in the production of barley, and has a comparative advantage in the production of alfalfa.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter13: Positive Externalities And Public Goods
Section: Chapter Questions
Problem 25P: Becky and Sarah are sisters 1who share a room. Their room can easily get messy, and their parents am...
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Eric and Ginny are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of alfalfa and barley each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing alfalfa or barley or to produce alfalfa on some of the land and barley on the rest. Alfalfa Barley (Bushels per acre) (Bushels per acre) Eric 20 4 Ginny 28 On the following graph, use the blue line (circle symbol) to plot Eric's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Ginny's PPF. 200 180 Eric's PPF 160 140 120 Ginny's PPF 100 80 60 40 BARLEY (Bushels)
Transcribed Image Text:Eric and Ginny are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of alfalfa and barley each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing alfalfa or barley or to produce alfalfa on some of the land and barley on the rest. Alfalfa Barley (Bushels per acre) (Bushels per acre) Eric 20 4 Ginny 28 On the following graph, use the blue line (circle symbol) to plot Eric's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Ginny's PPF. 200 180 Eric's PPF 160 140 120 Ginny's PPF 100 80 60 40 BARLEY (Bushels)
200 180 Eric's PPF 160 140 120 Ginny's PPF 100 80 60 40 100 200 300 400 500 600 700 800 900 1000 ALFALFA (Bushels) has an absolute advantage in the production of barley. has an absolute advantage in the production of alfalfa, and Eric's opportunity cost of producing 1 bushel of barley is bushels of alfalfa, whereas Ginny's opportunity cost of producing 1 bushel of barley is bushels of alfalfa. Because Eric has a opportunity cost of producing barley than Ginny, has a comparative advantage in the production of barley, and has a comparative advantage in the production of alfalfa. BARLEY (Bushels) 20
Transcribed Image Text:200 180 Eric's PPF 160 140 120 Ginny's PPF 100 80 60 40 100 200 300 400 500 600 700 800 900 1000 ALFALFA (Bushels) has an absolute advantage in the production of barley. has an absolute advantage in the production of alfalfa, and Eric's opportunity cost of producing 1 bushel of barley is bushels of alfalfa, whereas Ginny's opportunity cost of producing 1 bushel of barley is bushels of alfalfa. Because Eric has a opportunity cost of producing barley than Ginny, has a comparative advantage in the production of barley, and has a comparative advantage in the production of alfalfa. BARLEY (Bushels) 20
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3. Opportunity Cost

Ana and Dina are roommates. They spend most of their time studying (of course), but they leave some time for their favorite activities: making pizza and brewing root beer. Ana takes 3 hours to brew a gallon of root beer and 2 hours to make a pizza. Dina takes 7 hours to brew a gallon of root beer and 5 hours to make a pizza.
Ana's opportunity cost of brewing a gallon of root beer is    , and Dina's opportunity cost of brewing a gallon of root beer is    .
 
    has an absolute advantage in brewing root beer, and    has a comparative advantage in brewing root beer.
 
If Ana and Dina trade foods with each other,    will trade away pizza in exchange for root beer.
 
The price of pizza can be expressed in terms of gallons of root beer. The highest price at which pizza can be traded that would make both roommates better off is    of root beer, and the lowest price that makes both roommates better off is    of root beer per pizza.
 
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