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Unformatted text preview: unit of output. 2. To look at the opportunity cost of sacrificing one good for the other Advantages: • Absolute Advantage - o the comparison among producers of a good according to their productivity o Describes the productivity of one person, firm, or nation to that of another o *** The producer that requires a smaller quantity of inputs to produce a good is said to have Absolute Advantage in producing that good. • Comparative Advantage - (* the driving force of specialization) Notes: 2-4-10 Economics T-Th A. Ordonez Asch T. Hawthorn 809-195-3K1C 2/4/10 o Compares producers of a good according to their Opportunity Cost , that is what must be given up to obtain some item. o The producer who has the smaller opportunity cost of producing a good is said to have the comparative advantage in producing that good. • Exam 1: Thurs. Feb. 11th - chapter 1,2, &3 • Assignment 1 & objective sheets due before test...
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This note was uploaded on 05/10/2010 for the course ECONOMICS 809-195-3K taught by Professor A.ordonez during the Spring '10 term at Gateway Tech.
- Spring '10