1. Business
  2. Economics
  3. please use the chart below to answer all questions 2...

Question: please use the chart below to answer all questions 2...

Question details

Please use the chart below to answer all questions 2 through 4 on this problem set. Ambers totalAmbers total Merediths total Meredith s total production of wheat production of corn production of production of wheat corn Devote all time 20 lbs of wheat 0 lbs of corn to producing wheat 10 lbs of wheat 0 lbs of corn Devote all time 0 lbs of wheat 50 lbs of corn 0 lbs of wheat 25 lbs of corn to producing corn Note: Assume that both Amber and Meredith can produce any corresponding linear combination of pie and cake. Draw and label Ambers production possibility frontier (PPF). a) What is Ambers opportunity cost of producing a lb of wheat? b) What is Ambers opportunity cost of producing a lb of corn? 2. 3. Draw and label Merediths production possibility frontier (PPF). a) b) What is Merediths opportunity cost of producing a lb of wheat? What is Merediths opportunity cost of producing a lb of corn? 4. Consider both Ambers PPF and Merediths PPF: a) Who has the absolute advantage in producing wheat? b) Who has the absolute advantage in producing corn? e)Who has the comparative advantage in producing wheat? d) Who has the comparative advantage in producing corn? e) In this example, explain if there are any gains from Amber and Meredith trading.

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution