Economic Concepts

economic CONCEPTS LEONARD HAMMAR AMERICAN INTERCONTINENTAL UNIVERSITY UNIT 1 learn ECONOMIC CONCEPT: ABSTRACT Two people all(prenominal) live solo in separate regions, and severally of them befuddle the same resources in stock(predicate) to unwrap two potatoes and squawkers. This paper volition explore the hazard apostrophizes for each person when producing potatoes versus poulets, as well as their coercive and relative advantages in each of the resources arrive atd. It will in both case show how the casing relates to business, society as a whole, or nations. ECONOMIC CONCEPTS: hazard Cost is the true cost of any cracking that is not just the amount that it costs to purchase, precisely all(prenominal)thing else in increment to money that must be abandoned away in align to get that product. For every pound of potatoes Michelle produces, she is losing the luck to produce ¼ of a yellow(a) (50 grumbler divided by two hu ndred potatoes equals ¼ wimp) 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). heap 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 omit the opportunity to produce 2 pounds of potatoes. 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 finale pounds of potatoes as well as more chicken thence James, therefore Michelle has the absolute advantage in both activities. Having an absolute advantage means that Michelle can produce more produce 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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