Microeconomics Unit 1 Individual Project

Microeconomics Unit 1 Individual Project - Microeconomics...

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Microeconomics Unit 1 Individual Project 1 Microeconomics Unit 1 Individual Project Warren Synecky ECON220-1002B-13 May 1 st , 2010
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Microeconomics Unit 1 Individual Project 2 Michelle’s opportunity cost of producing potatoes is ¼ of a chicken for every pound of potatoes she grows a year equaling 50 chickens a year. Her opportunity cost of raising chickens is 4 pounds of potatoes for every chicken she raises equaling 200 lbs of potatoes a year. James’ opportunity cost of producing potatoes is ½ of a chicken for every pound of potatoes equaling 40 chickens a year. His opportunity cost of raising chickens is 2 pounds of potatoes for every chicken equaling 80 pounds of potatoes a year. In this example, Michelle has the absolute advantage in both areas. She can produce more of each product using the same resources. Michelle also has the comparative advantage in producing potatoes. It would only cost her ¼ of a chicken per pound of potatoes as compared to James where it would cost him ½ of a chicken for a pound of potatoes. James has a comparative
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Microeconomics Unit 1 Individual Project - Microeconomics...

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