Economics Fun

Economics 1A HW#2
Shannon Garcia

An integral and important part of economics is fortune follow. The chance cost of an item is what you give up to pretend that item. When making any decision, people should be aware of the opportunity costs that accompany any possible action. An example coffin nail help to explain this concept. Lets discuss workers in Scotland and Columbia. Workers in Scotland disregard pick 20 pounds of coffee or shear 50 pounds of woolen per hour. Workers in Columbia can pick 200 pounds of coffee or shear cytosine pounds of wool per hour. For Scottish workers, the tycoon to shear 50 pounds of wool would be the opportunity cost of picking coffee. For Columbian workers, the ability to shear 100 pounds of wool would be the opportunity cost of picking coffee. Another important aspect is absolute favour. economist use this term when comparing the productivity of one person, firm, or nation to that of another(prenominal). The assertr that requires a smaller quantity of inputs to produce a grave is said to put one over the absolute advantage in producing said good. This is true in the above scenario as well. In both wool and coffee production, Columbian workers have the absolute advantage.



In the same time period as the Scottish (1 hour), they are able to shear 100 pounds of wool (vs. 50 pounds) and able to pick 200 pounds of coffee (vs. 20 pounds). Another type of advantage that is economically important is relative advantage. Comparative advantage is the ability to produce a good at a lower opportunity cost than another producer. In this scenario, the Scottish workers have comparative advantage in shearing wool, and the Colombian workers

have the comparative advantage in picking coffee. See the table below for a collapse explanation.
| Opportunity cost of:|
| 1 lb of wool| 1 lb of coffee|
Scottish...If you want to get a beat essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .