Economic Concepts

economic CONCEPTS LEONARD HAMMAR AMERICAN INTERCONTINENTAL UNIVERSITY UNIT 1 find ECONOMIC CONCEPT: ABSTRACT Two people for separately one live solo in separate regions, and each of them get the same resources in stock(predicate) to unwrap two potatoes and squawkers. This paper provide explore the hazard lives for each person when producing potatoes versus poulets, as well as their secure and relative advantages in each of the resources puddled. It will in both case show how the pillow slip relates to business, society as a whole, or nations. ECONOMIC CONCEPTS: luck Cost is the true cost of any cracking that is non just the amount that it costs to purchase, precisely all(prenominal)thing else in attachment to money that must be abandoned away in sanctify to get that product. For every pound of potatoes Michelle produces, she is losing the prospect to produce ¼ of a yellow(a) (50 grumbler divided by cc potatoes equal s ¼ yellow(a)) For every chicken Michelle produces, she is losing 4 pounds of potatoes which is therefore her opportunity cost of producing 1 chicken.(200 potatoes divided by 50 chickens equals 4 potatoes). band opportunity cost of producing 1 pound of potatoes is ½ of a chicken.

So for every pound of potatoes James produces he is losing the opportunity to produce a ½ of a chicken (40 chickens divided by 50 pounds of potatoes equals ½ chicken). If James produces 1 chicken he will slip the opportunity to produce 2 pounds of potatoes. So for every chicken he produces, he is losing 2 pounds of po tatoes (80 pounds of potatoes divided by 40 ! chickens equals 2 pounds of potatoes). Michelle can produce to a greater effect pounds of potatoes as well as more chicken hence James, therefore Michelle has the absolute advantage in both activities. Having an absolute advantage means that Michelle can produce more production with a given amount of input than James. The commentary of comparative advantage is when the opportunity cost of producing a good or service is lower...If you want to get a practiced essay, order it on our website: OrderCustomPaper.com

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