Micro Ch 3 1 Absolute Advantage 2 Comparative Advantage other producer a The ability to produce a good using fewer inputs than another producer b Typically has to do with time ex who can do it faster better a The ability to produce a good at a lower opportunity cost than the b Ex Lebron can shoot three point shots better than us we would shoot free throws Lebron would shoot three point c Ex Paige and Shawn Gardening Corp have bushes and lawns i When thinking about comparative advantage ask who would you make do what ii Opportunity cost of a bush L B opportunity cost of lawns B L iii Whichever is in the bottom of the fraction is what you are calculating the opportunity cost of d Ex two countries US and Japan two goods Computers and Wheat one resource labor PPF graphs that are bowed 3 a Opportunity cost changes depending on how much you have b If down to the last ten wheat we would want more than one computer because of scarcity c Computer might cost more than ten wheat if you have a lot of wheat and little or no computers 4 Export goods produced domestically and sold abroad 5 Import goods produced abroad and sold domestically
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