Econ Notes - few goods o little specialization Money-medium...

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EXAMPLE 1 Only 1 hour week 1) iron shirts 2) type papers 3 page paper due Friday and want ironed shirts YOU—1/2 hoour to type a hand written paper 10 minutes to iron a shirt ROOMMATE—1 hour to type hand written paper 5 minutes to iron a shirt each do your own ( paper has priority)… YOU--- 1 paper and 3 shirts ROOMIE--- 1 paper Opportunity cost of typing a paper for you is 3 shirts the roomies opportunity cost is 12 shirts Comparative advantage you type 2 papers roomie irons 12 shirts EXAMPLE 2 You—30 minutes to write paper 10 minutes to iron shirt Roomie—1 hour to write a paper 12 minutes to iron a shirt Opportunity cost You—1 paper ….3 shirts Roomie—1 paper ….5 shirts If you both specialize Without specialization (whole) Roomie Shirts 5 shirts 3 You Paper 2 papers 2
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Barter - trade products for other products - simple economics o
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Unformatted text preview: few goods o little specialization Money-medium of exchange (everybody accepts in return for goods & services)-facilitates exchange-allows for greater specialization specialization; increased at mcdonalds someone takers order someone fries French fries. . someone putting burger together as a result takes less time than if you did it all at your house invidual preferances; natural ability comes out experience (learning) no need to shift between tasks can pourchase labor saving machinery which may not be practicul at your house ( industrial milkshake maker) downside repitive, tedius health hazards ( keep pushing down all day) routine tasks PPF (SLIDE) prouction possibilities: an ecopnopmy has millions of different resources that can be combined in millions kinds of ways to produce millions of goods and services...
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This note was uploaded on 10/05/2011 for the course ECON 2005 at Virginia Tech.

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Econ Notes - few goods o little specialization Money-medium...

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