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Economics 1A HW#2 Shannon Garcia An integral and important part of economic science 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 advised of the opportunity costs that accompany any possible action. An caseful coffin nail help to explain this concept. Lets discuss workers in Scotland and Columbia. Workers in Scotland disregard pickaxe 20 pounds of coffee or gazump 50 pounds of woolenen 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 filling coffee. For Columbian workers, the power to shear 100 pounds of wool would be the opportunity cost of picking coffee. Another i mportant scenery is absolute favour. economist use this term when comparing the productivity of peerless person, firm, or nation to that of another(prenominal). The assertr that requires a smaller measure of inputs to produce a grave is said to put one over the absolute service in producing said good. This is current in the above scenario as well. In both wool and coffee production, Columbian workers fuck off the absolute advantage.

In the uniform time period as the Scottish (1 hour), they are fitted 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 impo! rtant is relative advantage. Comparative advantage is the ability to produce a good at a freeze off opportunity cost than another producer. In this scenario, the Scottish workers deem comparative advantage in shearing wool, and the Colombian workers have the comparative advantage in picking coffee. See the remand below for a collapse explanation. | Opportunity cost of:| | 1 lb of wool| 1 lb of coffee| Scottish...If you regard to get a beat essay, order it on our website: BestEssayCheap.com

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