Concept of Microeconomics

Concept of - Mary has the comparative advantage in producing corn at the lower opportunity cost the John has Which person has comparative advantage

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Concepts 1 Concept of Microeconomics American InterContinental University Joe White
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Concepts 2 What is Mary's opportunity cost of producing corn? Mary’s opportunity cost of producing corn is not producing pigs and the potential of consequences of not producing pigs. What is Mary's opportunity cost of producing pigs? Mary’s opportunity cost of producing pigs is not producing corn and the potential of consequences of not producing corn. What is John' opportunity cost of producing corn? John’s opportunity cost of producing corn is not producing pigs and the potential of consequences of not producing pigs. What is John' opportunity cost of producing pigs? John’s opportunity cost of producing pigs is not producing corn and the potential of consequences of not producing corn. Which person has an absolute advantage in both activities? Mary has the absolute advantage in both activities to produce more pigs and corn then John does. Which person has comparative advantage in corn?
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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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This note was uploaded on 04/07/2011 for the course ECON 101 taught by Professor Sei during the Spring '11 term at American Academy of Art.

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Concept of - Mary has the comparative advantage in producing corn at the lower opportunity cost the John has Which person has comparative advantage

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