Producer Food Shelter
Rochelle 200 OR 50
Larry 150 OR 30
Above we have information for two different producers, Rochelle and Larry, who can each produce food, shelter, or some combination of the two using only 1 unit of labor and 50 units of capital (each). Specifically, with the given inputs, Rochelle can produce 200 units of food OR 50 units of shelter, or some combination of the two and Larry can produce 150 units of food OR 30 units of shelter, or some combination of the two.
Calculate the opportunity cost of producing one more unit of food for Rochelle. Be sure to include the units her opportunity cost is measured in.
Calculate the opportunity cost of producing one more unit of food for Larry. Be sure to include the units his opportunity cost is measured in.
If comparative advantage exists when a producer has the lowest opportunity cost, who has comparative advantage in production of food?