Answer:
Rajiv has an absolute advantage in the production of alfalfa, and Rajiv has an absolute advantage in the production of barley. Rajiv's opportunity cost of producing 1 bushel of barley is 0.2 bushels of alfalfa, whereas simone's opportunity cost of producing 1 bushel of barley is 0.25 bushels of alfalfa. Because rajiv has a lower opportunity cost of producing barley than simone, Rajiv has a comparative advantage in the production of barley, and Simone has a comparative advantage in the production of alfalfa.
Explanation:
Please find attached the table used in answering this question
A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.
A company has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other countries
For Rajiv :
Opportunity cost in producing barley = 8 / 40 = 0.2
Opportunity cost in producing alfalfa = 40/8 = 5
For Simone :
Opportunity cost in producing barley = 7 / 28 = 0.25
Opportunity cost in producing alfalfa = 28/7 = 4
Rajiv has a lower opportunity cost in the production of barley and so he has a comparative advantage in the production of barley.
Simone has a lower opportunity cost in the production of barley and so he has a comparative advantage in the production of alfalfa.
Rajiv has an absolute advantage in the production of both barley and alfalfa because he produces higher quanties compared to Simone
