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ECON220_Unit 1_ IP

# ECON220_Unit 1_ IP - Opportunity Costs 1 Is Opportunity...

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Opportunity Costs 1 Is Opportunity Costs Used In Everyday Transactions? ECON-220 Unit 1 IP assignment April 28, 2011

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2 Abstract In this week’s IP assignment we are to discuss the meaning of opportunity costs, absolute and comparative advantages and economic supply and demand. In the given scenario, Michelle and James both live in isolated regions with the same resources. They both raise potatoes and chickens but Michelle has 120 more potatoes and 10 more chickens than James. We are to use knowledge gained from our learning materials to find a solution to each question regarding economic supply and demand (Henry, 2008) .
Opportunity Costs 3 Is Opportunity Costs Used In Everyday Transactions? Michelle has 200 potatoes and 50 chickens. James has 80 potatoes and 40 chickens. Michelle’s opportunity cost for producing potatoes is: 1 potato equals ¼ of a chicken. To solve the equation begin by taking the given amount from the chart and solve; 200 potatoes and 50 chicken; 200 divided by 200 potatoes equals 1; 50 divided by 20 potatoes equals ¼. Michelle’s opportunity cost for producing 1 chicken is: 1 chicken equals 4 potatoes. To solve the

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ECON220_Unit 1_ IP - Opportunity Costs 1 Is Opportunity...

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