(Solved):   (Ashima or Loc)    has an absolute advantage in the production of squash, and &n ...

 

(Ashima or Loc)    has an absolute advantage in the production of squash, and   (Loc or Ashima) has an absolute advantage in the production of maize.

Loc's opportunity cost of producing 1 pound of maize is ______pounds of squash, whereas Ashima's opportunity cost of producing 1 pound of maize is______pounds of squash. Because Loc has a  (higher or lower)   opportunity cost of producing maize than Ashima, (Loc or Ashima)   has a comparative advantage in the production of maize, and (Ashima or Loc)   has a comparative advantage in the production of squash.

2. Comparative and absolute advantage Loc and Ashima are farmers. Each one owns a 14-acre plot of land. The following table shows the amount of squash and maize each farmer can produce per year on a given acre. Each farmer chooses whether to devote all acres to producing squash or maize or to produce squash on some of the land and maize on the rest. On the following graph, use the blue line (circle symbol) to plot Loc's production possibilities frontier (PPF), and use the purple line (diamond symbol) to plot Ashima's PPF. has an absolute advantage in the production of squash, and has an absolute advantage in the production of maize. Loc's opportunity cost of producing 1 pound of maize is pounds of squash, whereas Ashima's opportunity cost of producing 1 pound of maize is pounds of squash. Because Loc has a opportunity cost of producing maize than Ashima, has a comparative advantage in the production of maize, and has a comparative advantage in the production of squash.