Question 1. Comparative Advantage The concept of comparative advantage shows that as long as two agents have different opportunity costs in the production of different goods, there will be room for...

q50c- Explain who should grow apples and who should grow wheat using the concept of comparative advantage. Who is the buyer on the market for wheat? Who is the seller?

Extracted text: Question 1. Comparative Advantage The concept of comparative advantage shows that as long as two agents have different opportunity costs in the production of different goods, there will be room for both of them to benefit from trade if they specialise. Suppose that there are only two people, Greta and Carlos, who can grow apples and wheat. Their production possibilities when they specialise in the production of either good is given in the below table. Production if 100% of time is spent on one good Greta 800 apples or 40 tonnes of wheat Carlos 600 apples or 15 tonnes of wheat