Professional Documents
Culture Documents
Comparative Advantage Problems
Comparative Advantage Problems
Burgers Burgers
50
30 30
10
10 25 Cookies 40 60 Cookies
(dozens) (dozens)
Step 1: Max Poss Max Poss Opp Cost Opp Cost Special-
Output of Output of Of Making Of Making ization
Burgers Cookies Burgers Cookies
Karen
George
Step 4: Indicate the consumption point, after specialization, for each person on the
graphs above. Label each point C.
FORMULA:
Opportunity cost Max. possible output of the other good
of making one good = Max. possible output of the good you are
making
Andorra Monaco
Music Music 150
Boxes Boxes
100
80
50
75 150 30 75
Watches Watches
Step 1: Max Poss Max Poss Opp Cost Opp Cost Special-
Output of Output of Of Making Of Making ization
M. Boxes Watches M Boxes Watches
Andorra
Monacco
Step 4: Indicate the consumption point, after specialization, for each country on the
graphs above. Label each point C.
FORMULA:
Opportunity cost Max. possible output of the other good
of making one good = Max. possible output of the good you are
making