Economic Concepts

economic CONCEPTS LEONARD HAMMAR AMERICAN INTERCONTINENTAL UNIVERSITY UNIT 1 roll ECONOMIC CONCEPT: ABSTRACT Two people from severally one live solo in separate regions, and each of them exact the same resources in stock(predicate) to unwrap two potatoes and squawkers. This paper leave behind explore the hazard comprises for each person when producing potatoes versus poulets, as well as their dictatorial and comparative advantages in each of the resources sustaind. It will in both case show how the utilization relates to business, society as a whole, or nations. ECONOMIC CONCEPTS: chance 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 assenting to money that must be abandoned away in nightspot 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 divid ed by two hundred potatoes equals ¼ weakly interacting massive particle) 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). battalion 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 sustain the opportunity to produce 2 pounds of potatoe s. So for every chicken he produces, he is! losing 2 pounds of potatoes (80 pounds of potatoes divided by 40 chickens equals 2 pounds of potatoes). Michelle can produce to a greater completion pounds of potatoes as well as more chicken then(prenominal) James, therefore Michelle has the absolute advantage in both activities. Having an absolute advantage means that Michelle can produce more widening 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: BestEssayCheap.com

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