microeconomics - Solution; Potatoes Chickens Michelle 200...

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Solution; a) What is Michelle’s opportunity cost of producing potatoes? Michelle’s opportunity cost of producing potatoes = 50chickens/200 pounds of potatoes = ¼ chicken per pound of potatoes b) What is Michelle’s opportunity cost of producing chickens? Michelle’s opportunity cost of raising chickens = 200/50 = 4 pound of potatoes per chicken c) What is James’ opportunity cost of producing potatoes? James’ opportunity cost of producing potatoes = 40 chicken/80 pound of potatoes =1/2 chicken per pound of potatoes d) What is James’ opportunity cost of producing chickens ? James’ opportunity cost of raising chickens = 80/40 = 2 pound of potatoes per chicken e) Which person has an absolute advantage in which activities? A person with greater production per unit of time has an absolute advantage in that activity Hence, Michelle has an absolute advantage in both producing potatoes and raising chickens. f)
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This note was uploaded on 06/12/2011 for the course ECON 101 taught by Professor Phonetic during the Spring '11 term at American InterContinental University.

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microeconomics - Solution; Potatoes Chickens Michelle 200...

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