Kelen and Chris produce rice and wheat. In an hour, Kelen can produce 1 unit of wheat or one unit of rice, while Chris can produce 2 units of wheat and 3 units of rice. They each work 10 hours a day.
i. Who has an absolute advantage in producing wheat? Who has an absolute advantage in producing rice? Explain.
ii. Who has comparative advantage in producing wheat? Who has Comparative advantage in producing rice? Draw a production possibilities frontier for Kelen and Chris assuming that each spends same number of hours each day as the other in producing wheat and rice.
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