Draw a new PPF to show the effect that a prolonged drought would have on the initial production possibilities frontier and production. Soybeans Cotton Your Turn Draw a bowed production possibilities frontier that shows the trade-off between the production of cotton and the production of soybeans. Suppose genetic modification makes soybeans resistant to insects, allowing soybean yield to double. Show the effect of this technological change on the initial production possibilities frontier and production. Soybeans Cotton
8/20/2016 6 Your Turn The slope of a production possibilities frontier measures the ________ of producing one more unit of a good. A) marginal revenue B) total revenue C) marginal cost D) opportunity cost Comparative Advantage & Trade Three concepts you need to know. Absolute Advantage: The ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources. Comparative Advantage: The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors. Opportunity Cost: The highest-valued alternative that must be given up to engage in an activity.