Economic Concepts

economic CONCEPTS LEONARD HAMMAR AMERICAN INTERCONTINENTAL UNIVERSITY UNIT 1 externalize ECONOMIC CONCEPT: ABSTRACT Two people to each one live solo in separate regions, and each of them support the same resources in stock(predicate) to unwrap two potatoes and squawkers. This paper entrust explore the hazard hails for each person when producing potatoes versus poulets, as well as their arrogant and relative advantages in each of the resources explicated. It will in both case show how the congressman relates to business, society as a whole, or nations. ECONOMIC CONCEPTS: chance 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 extension to money that must be abandoned away in purchase order 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 b y two hundred potatoes equals ¼ grumbler) 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). anchor ring 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 misplace the opportunity to produce 2 pounds of potatoes. So for every chicken h e produces, he is losing 2 pounds of potatoe! s (80 pounds of potatoes divided by 40 chickens equals 2 pounds of potatoes). Michelle can produce to a greater end pounds of potatoes as well as more chicken thusly James, therefore Michelle has the absolute advantage in both activities. Having an absolute advantage means that Michelle can produce more return 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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