Which person has a absolute advantage in both activities

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Suppose two people, Mary and John each live in an isolated region. They each have the same resources availabe and they grow corn and raise pigs. Mary devotes all her resources to growing corn, which she raises 200 pounds of corn per year. Which she also raises pigs 50 pigs per year. John devotes all his resources to growing corn which he raises 80 pounds of corn per year. John also raises pigs, 40 pigs per year. What is Mary's opportunity cost of producing corn? What is Mary's opportunity cost of producing pigs? What is John's opportunity cost of producing corn? What is John's opportunity cost of producing pigs? Which person has a absolute advantage in both activities? Which person has comparative advantage in corn? Which person has compartative advantage in pigs? Suppose that they are thinking of specializing completely in the area in which they have a compartive advantage, and then trading at a rate of 2.5 pounds of corn for 1 pig, would they each be better off?

Reference no: EM13222518

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