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Question
malik has an absolute advantage in the production of broccoli, and malik has an absolute advantage in the production of spinach.
malik’s opportunity cost of producing 1 pound of spinach is 2 pounds of broccoli, whereas yusuf’s opportunity cost of producing 1 pound of spinach is 4 pounds of broccoli. because malik has a lower opportunity cost of producing spinach than yusuf, malik has a comparative advantage in the production of spinach, and yusuf has a comparative advantage in the production of broccoli.
Step1: Identify absolute advantage
Absolute advantage means producing more of a good with the same resources. From the graph:
- Malik can produce 80 pounds of spinach or 32 pounds of broccoli.
- Yusuf can produce 240 pounds of broccoli or 16 pounds of spinach.
So, Malik produces more spinach (80 > 16), Yusuf produces more broccoli (240 > 32).
Step2: Calculate opportunity cost for spinach
Opportunity cost of 1 spinach = $\frac{\text{Broccoli given up}}{\text{Spinach produced}}$
- Malik: $\frac{32}{80} = 0.4$ pounds of broccoli
- Yusuf: $\frac{240}{16} = 15$ pounds of broccoli
Step3: Calculate opportunity cost for broccoli
Opportunity cost of 1 broccoli = $\frac{\text{Spinach given up}}{\text{Broccoli produced}}$
- Malik: $\frac{80}{32} = 2.5$ pounds of spinach
- Yusuf: $\frac{16}{240} = \frac{1}{15} \approx 0.067$ pounds of spinach
Step4: Assign comparative advantage
Comparative advantage goes to the producer with lower opportunity cost:
- Lower spinach opportunity cost: Malik (0.4 < 15)
- Lower broccoli opportunity cost: Yusuf (0.067 < 2.5)
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- Absolute advantage: Malik has an absolute advantage in the production of broccoli, and Malik has an absolute advantage in the production of spinach.
- Opportunity cost: Malik's opportunity cost of producing 1 pound of spinach is $\boldsymbol{0.4}$ pounds of broccoli, whereas Yusuf's opportunity cost of producing 1 pound of spinach is $\boldsymbol{15}$ pounds of broccoli.
- Comparative advantage: Because Malik has a lower opportunity cost of producing spinach than Yusuf, Malik has a comparative advantage in the production of spinach, and Yusuf has a comparative advantage in the production of broccoli.