note - Ch 2

note - Ch 2 - Econ 251 Fall 2009 Handout 2 08/27/2009 Class...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 251 Fall 2009 Handout 2 08/27/2009 1 Class &otes Chapter 2 – The Economic Problem Outline: s Production Possibilities and Opportunity Cost s Using Resources Efficiently s Economic Growth I. People’s abilities and the quality of their resources are different the opportunity costs of producing various goods differ across individuals! Ex: Def. Absolute Advantage An individual has an absolute advantage in the production of a good if that individual can ______________________________ or he/she can produce the __________________________ ______________. Def. Comparative Advantage An individual has a comparative advantage in an activity if that person _________________ _____________________________________. Example #1 : Fast-food Business Ann and James have a Fast-food Restaurant. # of sandwiches per hour # of salads per hour Ann 40 40 James 30 10
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Econ 251 Fall 2009 Handout 2 08/27/2009 2 1. Who has absolute advantage in making sandwiches and salads? Answer: 2. Who has comparative advantage in making sandwiches? And salads? Need to look at the opportunity costs:
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 8

note - Ch 2 - Econ 251 Fall 2009 Handout 2 08/27/2009 Class...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online