For the next nine questions, refer to the table above. Nebraska and Virginia eac
ID: 1209450 • Letter: F
Question
For the next nine questions, refer to the table above. Nebraska and Virginia each have 100 acres of farmland. The table gives the hypothetical figures for yield per acre in the two states. Who has the absolute advantage in the production of wheat? Nebraska Virginia Both of the above None of the above Who has the absolute advantage in the production of cotton? Nebraska Virginia Both of the above None of the above Who has the comparative advantage in the production of wheat? Nebraska Virginia Both of the above None of the above Who has the comparative advantage in the production of cotton? Nebraska Virginia Both of the above None of the aboveExplanation / Answer
Answer 1:
Absolute Advantage occurs when a country is able to produce more units of a commodity than another country using same amount of resources.Virginia produces more wheat as compared to Nebraska and thus Virginia has absolute advantage.
Answer 2:
Virginia has absolute advantage in producing cotton.
Answer 3:
Nebraska.
Opportunity cost of producing wheat in Virginia = 10 / 15 = 0.67 units of cotton ( Total units of cotton / total units of wheat)
Opportunity cost of producing wheat in Nebraska = 6 / 12 = 0.50 units of cotton
It is low in Nebraska.
Answer 4;
Opportunity cost of producing cotton in Nebraska = 2 units of wheat
Opportunity cost of producing cotton in Virginia = 15 / 10 = 1.5 units of wheat
So, low in Virginia. So Answer is Virginia.