Darnell and Eleanor are farmers. Each one owns a 20-acre plot of land. The following table shows the amount of barley and alfalfa each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing barley or alfalfa or to produce barley on some of the land and alfalfa on the rest.

Barley Alfalfa
Darnell 40 8
Eleanor 28 7

_____________ has an absolute advantage in the production of barley, and _____________ has an absolute advantage in the production of alfalfa. Darnell's opportunity cost of producing 1 bushel of alfalfa is _____________ bushels of barley, whereas Eleanor's opportunity cost of producing 1 bushel of alfalfa is_____________bushels of barley. Because Darnell has a _____________ opportunity cost of producing alfalfa than Eleanor, _____________ has a comparative advantage in the production of alfalfa, and _____________ has a comparative advantage in the production of barley.

Respuesta :

Answer:

Darnell

Darnell

5

4

higher

eleanor

Darnell

Explanation:

A person has comparative advantage in production if it produces at a lower opportunity cost when compared to other people.

A person has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other people

Darnell produces more quantities of Barley and Alfafa when compared to Eleanor. Darnell has a comparative advantage in the production of both commodities

Darnell's opportunity cost of producing 1 bushel of alfalfa = Barley produced / alfalfa produced = 40 / 8 = 5

Eleanor's opportunity cost of producing 1 bushel of alfalfa = 28 /7 = 4

Eleanor has a lower opportunity cost in producing alfalfa, thus she has a comparative advantage in producing alfalfa and Darnel has a comparative advantage in the production of barley