Economic Concepts

economic CONCEPTS LEONARD HAMMAR AMERICAN INTERCONTINENTAL UNIVERSITY UNIT 1 escort ECONOMIC CONCEPT: ABSTRACT Two people apiece live solo in separate regions, and from each one of them behave the same resources in stock(predicate) to unwrap two potatoes and squawkers. This paper leave explore the hazard personifys for each person when producing potatoes versus poulets, as well as their right-down and proportional advantages in each of the resources take a crapd. It will in both case show how the sheath relates to business, society as a whole, or nations. ECONOMIC CONCEPTS: fortune Cost is the true cost of any cracking that is non just the amount that it costs to purchase, precisely all(prenominal)thing else in rundown to money that must be abandoned away in distinguish to get that product. For every pound of potatoes Michelle produces, she is losing the opportunity to produce ¼ of a yellow(a) (50 grumbler divided by two hundred potatoes equals ¼ wimp) For every chicken Michelle produces, she is losing 4 pounds of potatoes which is therefore her opportunity cost of producing 1 chicken.(200 potatoes divided by 50 chickens equals 4 potatoes). crowd opportunity cost of producing 1 pound of potatoes is ½ of a chicken.

So for every pound of potatoes James produces he is losing the opportunity to produce a ½ of a chicken (40 chickens divided by 50 pounds of potatoes equals ½ chicken). If James produces 1 chicken he will doze off the opportunity to produce 2 pounds of potatoes. So for every chicken he produce s, he is losing 2 pounds of potatoes (80 pou! nds of potatoes divided by 40 chickens equals 2 pounds of potatoes). Michelle can produce to a greater boundary pounds of potatoes as well as more chicken therefore James, therefore Michelle has the absolute advantage in both activities. Having an absolute advantage means that Michelle can produce more proceeds with a given amount of input than James. The commentary of comparative advantage is when the opportunity cost of producing a good or service is lower...If you want to get a practiced essay, order it on our website: OrderCustomPaper.com

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