Question

Dmitri and Frances 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.

	Corn	Rye
	(Bushels per acre)	(Bushels per acre)
Dmitri	20	5
Frances	50	10

Dimitri or Frances?? has an absolute advantage in the production of corn, and Dimitri or Frances?? has an absolute advantage in the production of rye.

Dmitri's opportunity cost of producing 1 bushel of rye is ??

bushels of corn, whereas Frances's opportunity cost of producing 1 bushel of rye is

bushels of corn. Because Dmitri has a   opportunity cost of producing rye than Frances,   has a comparative advantage in the production of rye, and   has a comparative advantage in the production of corn.

Answer 1

Frances has an absolute advantage in the production of corn, and Frances has an absolute advantage in the production of rye.

Dmitri's opportunity cost of producing 1 bushel of rye is 20/5 = 4 bushels of corn, whereas Frances's opportunity cost of producing 1 bushel of rye is 50/10 = 5 bushels of corn. Because Dmitri has a Lower opportunity cost of producing rye than Frances, Dmitri has a comparative advantage in the production of rye, and Frances has a comparative advantage in the production of corn.