103lecture9 - Economics 103 Lecture 9 Comparative Advantage...

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Economics 103 Lecture # 9 Comparative Advantage
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When we introduce the idea of Comparative Advantage, we’re starting to talk about Production . Comparative Advantage: Individuals can produce more by specializing in their least cost activities.
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20 minutes 30 minutes 16 minutes 8 minutes Who has the comparative advantage?
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Clearly my wife is Absolutely Better at everything (she tells me all the time). But who is the low cost cleaner and weeder? Is twice as good at weeding. 1 vacuum costs 2 weedings. Is 1½ as good at vacuuming. 1 vacuuming costs 2/3 of a clean garden.
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weeding. I am the low cost cleaner …. I have a comparative advantage in vacuuming. If we take turns doing both jobs, then two weedings and two cleanings will take 140 minutes (60+80) plus 60 minutes (40+20) for a total of 200 minutes. If we specialize to our CA: 60+60 =120 20+20 = 40 Total 160 minutes. We save 40 minutes for the same output.
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103lecture9 - Economics 103 Lecture 9 Comparative Advantage...

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