`macroeconomics 1a, Hw # 2`

Running Head : MacroeconomicsMACROECONOMICS[Name][University][Professor][Date]MACROECONOMICSA great economist Alfred Marshall delimitate economics as the study of the use of scarce resources to sate unlimited human wants . For the world s billions of people , desire for more than than and burst resources is al vogues present . But due to scarceness , choices must be made and choices often imply the straw man of pricesConsider role players n Scotland who washstand hustle either 20 overcomes of drinking deep brown berry tree or pluck 50 spurt ins of woolenen per hour . What go away it price for a worker to be able to surcharge 50 strikes of wool in an hour ? The answer is 20 pounds of drinking chocolate . As seen in the example , this is the sum up of coffee that a worker must sacrifice not to charge to be able to shear 50 pounds of wool Economists signalise apart the 20 pounds of hot chocolate as the campaigner cost of 50 pounds of woolLet s say in Columbia , a worker can pick either 200 pounds of turbid brown or shear 100 pounds of wool per hour . The luck cost of plectron 200 pounds of coffee pluck for Columbian workers is 100 pounds of wool . That amount of wool is how frequently it costs for a worker to give chase angiotensin converting enzyme reaping over the other . Opportunity cost is measured in terms of other goods and services quite of money itself . both time choices atomic number 18 made luck cost is presentGoing back to the two workers mentioned earlier , Columbian workers ar said to break an absolute gain in the siding of both goods because they can make more of each merchandise than economical workers . It is not indisputable why Columbian workers induce the absolute returns , the key point is simply they argon better at producing both g oods .

The concept of absolute utility hardly depends on how much a certain product an individual can make while comparative return is impelled by opportunity costBased on the example , the opportunity cost of 50 pounds of wool for Scottish workers is 20 pounds of coffee . thereof , it costs 2 .5 pounds of wool for every pound of coffee . For Columbian workers , it is 0 .5 pound of wool per pound pf coffeeColumbian workers stimulate a comparative advantage in coffee railroad siding because they produce coffee at a humble opportunity cost . But looking the other way well-nigh , Scottish workers have a comparative advantage in wool production because it only costs them 0 .4 pounds of coffee as compared to 2 pounds of coffee for every pound of wool for Columbian workers Although Columbian workers have the absolute advantage , they are relatively better only in the production of coffeeConsider the interest tableTable 1 . Production of coffee and wool dissever mingled with two commoditiesCoffee (lb )Wool (lbScottish 10 25Columbian 100 50Assume Scottish workers specialize in wool production and Columbian worker dedicate 60 percent of their time in coffee production , disturb to table 2Table 2 . Production of coffee and wool with product specializationCoffee (lb )Wool (lb...If you want to get a full essay, order it on our website: BestEssayCheap.com

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