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Global Econ - Comparative Advantage - lecture

Global Econ - Comparative Advantage - lecture

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Published by Katherine Sauer
comparative advantage example
comparative advantage example

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Categories:Types, School Work
Published by: Katherine Sauer on Jun 16, 2010
Copyright:Attribution Non-commercial

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02/10/2011

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Suppose you are shipwrecked alone on a desert island.With your survival skills you find that in one day you can:-catch 2 fish if you spend all day at it-gather 8 coconuts if you spend all day at itSuppose you work at producing food 6 days a week.In one week, you could produce:-12 fish if you spent all of your time fishing-48 coconuts if you spent allof your time gathering-a combination of the twogoods if you split your time³production possibilities´ -PP# C# F1248PP
 
# C# F1248PPSince you are alone, you canconsume only as much as youcan produce.Your consumption possibilities (CP) are equal toyour production possibilities.= CP
 
Suppose you discover that Shipwreck Sherry has been maroonedon a nearby island.In one day Sherry can:-catch 1 fish if she spends all day at it-gather 6 coconuts if she spends all day at itIn one week, she could produce:-6 fish if she spent all of her time fishing-36 coconuts if she spent allof her time gathering-a combination of the twogoods if she split her time# C# F636PP= CP

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