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Unformatted text preview: Mary has the comparative advantage in producing corn at the lower opportunity cost the John has. Which person has comparative advantage in pigs? Mary has the comparative advantage in producing pigs at the lower opportunity cost the John has. Concepts 3 Suppose that they are thinking of each specializing completely in the area in which they have a comparative advantage, and then trading at a rate of 2.5 pounds of corn for 1 pig, would they each be better off? Explain. No, John would be better off due to the fact the Mary produces 10 more pigs the John does. How would you extend the above narrative to businesses, society as a whole or nations? Explain. I would extend the above narrative to business by comparing it to a grocery store. Mary would be a bigger more known store such as a super Wal-Mart since she has more products and John would be a smaller store that’s not well known like a Safe-Way....
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