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Scanada maplesyrup58 copperwire67

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Unformatted text preview: are maximizers Absolute and Comparative Advantage 21:15 Absolute Advantage­ one entity can produce something either faster than or greater than another entity Comparative Advantage­ one entity can produce something at a LOWER MARGINAL OPPORTUNITY PRODUCTION COST cost than another entity U.S. Canada Maple Syrup 5 8 Copper Wire 6 7 5 steps to figuring out comparative advantage 1.Know the Definition of comparative advantage 2. Set up a table: Ireland ex: 1 Rum= _10_ Crystal, 1 Crystal= __1/10_ Rum 3. Go to the Xtremes (X and Y Games) 4. Fill in the blanks (starting with Puerto Rico first) 5. Circles and Arrows 21:15 Make yourself worse off in the short run to make yourself better in the long run Production Possibility Curve­ PP Curve PP Curve­ shifts outward its good, inward its bad Five Variables that Shift the PP Outward: Increase the productive labor force Increase the quantity and quality of natural resources. Increase the quantity and quality of capital stock. Increase health and education....
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This note was uploaded on 10/30/2012 for the course BUS 420 taught by Professor Thisal during the Fall '11 term at Arizona.

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