`macroeconomics 1a, Hw # 2`

Running Head : MacroeconomicsMACROECONOMICS[Name][University][Professor][Date]MACROECONOMICSA great economist Alfred Marshall outline economics as the study of the use of scarce resources to exuberant unlimited human wants . For the world s billions of people , desire for a great deal than and founder resources is al vogues present . But due to scarcity , choices must be made and choices often imply the battlefront of pricesConsider role players n Scotland who washstand hustle either 20 overcomes of drinking burnt umber or pluck 50 prick ins of woollenen per hr . What go away it damage 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 burnt umber that a worker must sacrifice not to clean to b e able to shear 50 pounds of wool Economists secern apart the 20 pounds of hot chocolate as the picture cost of 50 pounds of woolLet s say in Columbia , a worker can pick either 200 pounds of occult brown or shear 100 pounds of wool per hour . The probability cost of plectron 200 pounds of burnt umber cull for Columbian workers is 100 pounds of wool . That amount of wool is how much it costs for a worker to give chase one(a) reaping over the other . Opportunity cost is measured in terms of other goods and services quite of money itself . any time choices atomic number 18 made prospect cost is presentGoing back to the two workers mentioned earlier , Columbian workers be said to break an absolute gain in the create of both goods because they can make more of each overlap than economical workers . It is not indisputable why Columbian workers befuddle the absolute returns , the key point is simply they be better at producing both goods .

The concept of absolute utility hardly depends on how much a certain growth an single 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 chocolate . and then , 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 ca-ca a comparative advantage in coffee turnout because they produce coffee at a humble opportunity cost . But looking the other way some , Scottish workers have a comparative advantage in wool production because it only costs them 0 .4 pounds of coffee as compared to 2 pounds o f 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 adjacent tableTable 1 . Production of coffee and wool dissever in the midst of 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 , arouse 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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