Question

There are two neighboring farmers - Shirley and Bob. Both make the same two products - wheat and corn. If Shirley used all of her resources to harvest only corn then she would have 200,000 pounds of corn. If she only harvested wheat then she would have 300,000 pounds of wheat. If Bob only harvested corn then he would have 400,000 pounds of corn. If he harvested just wheat then he would have 350,000 pounds of wheat.

Which farmer has the relative comparative advantage harvesting wheat? Who has relative comparative advantage harvesting corn?

Answer 1

	Corn	Wheat
Shirley	200000	300000
Bob	400000	350000

Bob has Corn production of 400000 while Shirley has 200000, that means Bob produces 200000 pounds corn than Shirley.

Bob has Wheat production of 350000 while Shirley has 300000, that means Bob produces 50000 pounds corn than Shirley.

Therefore as Bob has higher percentage of production of Corn as compare to high production of Wheat than Shirley, he'll have Comparative advantage in harvesting Corn and therefore, Shiirley will have comparative advantage in harvesting wheat.