Economic Concepts

economic CONCEPTS LEONARD HAMMAR AMERICAN INTERCONTINENTAL UNIVERSITY UNIT 1 bewilder ECONOMIC CONCEPT: ABSTRACT Two people individually live solo in separate regions, and for each one of them go the same resources in stock(predicate) to unwrap two potatoes and squawkers. This paper go out explore the hazard speak tos for each person when producing potatoes versus poulets, as well as their compulsory and comparative advantages in each of the resources assumed. It will in both case show how the suit 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 addendum to money that must be abandoned away in do to get that product. For every pound of potatoes Michelle produces, she is losing the fortune to produce ¼ of a yellow(a) (50 grumbler divided by two hundred potat oes equals ¼ jaundiced) 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). gang 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 pot atoes (80 pounds of potatoes divided by 40 c! hickens equals 2 pounds of potatoes). Michelle can produce to a greater terminus pounds of potatoes as well as more chicken then James, therefore Michelle has the absolute advantage in both activities. Having an absolute advantage means that Michelle can produce more output signal 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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