Andrew and Beth are farmers. Each one owns a 12-acre plot of land. The following
ID: 1118174 • Letter: A
Question
Andrew and Beth are farmers. Each one owns a 12-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.
1._____ (Andrew, Beth) has an absolute advantage in the production of corn, and 2._______ (Andrew, Beth) has an absolute advantage in the production of rye.
Andrew’s opportunity cost of producing 1 bushel of rye is 3.______ bushels of corn, whereas Beth’s opportunity cost of producing 1 bushel of rye is 4._______ bushels of corn. Because Andrew has a 5._______ (Higher, Lower) opportunity cost of producing rye than Beth, 6.______ (Andrew, Beth) has a comparative advantage in the production of rye, and 7.______ (Andrew, Beth) has a comparative advantage in the production of corn.
Corn (Bushels Per Acre) Rye (Bushels Per Acre) Andrew 40 8 Beth 28 7Explanation / Answer
(1) Andrew has an absolute advantage in the production of corn, and 2._Andrew______ (Andrew, Beth) has an absolute advantage in the production of rye.Andrew’s opportunity cost of producing 1 bushel of rye is 3.______ bushels of corn, whereas Beth’s opportunity cost of producing 1 bushel of rye is 4.___5____ bushels of corn. Because Andrew has a 5.__Higher_____ (Higher, Lower) opportunity cost of producing rye than Beth, 6.___Beth___ (Andrew, Beth) has a comparative advantage in the production of rye, and 7.___Andrew___ (Andrew, Beth) has a comparative advantage in the production of corn.