Carlos and Deborah are farmers. Each one owns a 12-acre plot of land. The following table shows the amount of rye and corn each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing rye or corn or to produce rye on some of the land and corn on the rest. Rye Corn
(Bushels per acre) (Bushels per acre)
Carlos 18 6
Deborah 28 7

has an absolute advantage in the production of rye, and has an absolute advantage in the production of corn. Carlos's opportunity cost of producing 1 bushel of corn is bushels of rye, whereas Deborah's opportunity cost of producing 1 bushel of corn is bushels of rye. Because Carlos has a opportunity cost of producing corn than Deborah, has a comparative advantage in the production of corn, and has a comparative advantage in the production of rye.

Deborah

Deborah

3

4

lower

Carlos

Deborah

Explanation:

a person has comparative advantage in production if he / she produces at a lower opportunity cost when compared to other people

for carlos

the opportunity cost of producing rye = 6 / 18 = 0.33

the opportunity cost of producing corn = 18 / 6 = 3

for Deborah,

the opportunity cost of producing rye = 7 / 28 = 0.25

the opportunity cost of producing corn = 28 /7 =4

Carlos has a comparative advantage in the production of corn because he produces at a lower opportunity cost when compared with Deborah

Deborah has a comparative advantage in the production of rye because he produces at a lower opportunity cost when compared with Carlos

A person has absolute advantage in production if he produces more quantity of the product when compared to other people.

Deborah has absolute advantage in the production of both rye and corn

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explanation: