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Unformatted text preview: oz/day 24 16 PPF is straight due PPF and CPF Due to the per hour when under Production rate self-sufficiency 40 Corn oz/day 22 Corn oz/day The PPF is a strait line because of each individuals ability to always produce the same amount of both goods per/hour ABSOULUTE ADVANTAGE is an individual firm or nation has an absolute advantage over another individual farm or nation if he can produce more of the product with the same amount of recourses. Fred has absolute advantage in fish Fred has absolute advantage in corn COMPARISON BASED ON PRODUCTIVUTY COMPARATIVE ADVANTAGE is when an individual firm, or nation has a comparative advantage in the production of an item if it produces that item at a lower opportunity cost to the trading partner Comparison based on opportunity costs Opportunity cost of Fred Tom Each oz of fish 5/3 oz/corn 2 oz/corn Each oz of Corn 3/5 oz/corn oz of fish Comparative Comparative With With Fish Corn...
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This note was uploaded on 03/20/2008 for the course EC 201 taught by Professor Xasdf during the Fall '08 term at N.C. State.
- Fall '08