Raphael and Susan 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.

The concepts of absolute & comparative advantage in the production of two commodities arises from specific differences between two entities in the production functions for each of the commodities.

Hence, the Identification of these differences is the first step in ultimately determining potential gains from specialization and trade.

Number 1

The Bob and Cho's Production Possibility Frontier are shown in the following diagram as been attached as picture 2.

Number 2

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

Number 3

Bob's opportunity cost of producing 1 bushel of rye is 5 bushels of corn, whereas Cho's opportunity cost of producing 1 bushel of rye is 4 bushels of corn. Because Bob has a higher opportunity cost of producing rye than Cho, Cho has a comparative advantage in the production of rye, and Bob has a comparative advantage in the production of corn.

Note: Missing words are attached as picture.