Assignment Type: Individual ProjectDeliverable Length: 2–3 pages Suppose that two people, Michelle...

Question

Assignment Type: Individual ProjectDeliverable Length: 2–3 pages Suppose that two people, Michelle and James each live alone in an isolated region. They each have the same resources available, and theygrow potatoes and raise chickens. If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of potatoes per year. If she devotes all her resources to raising chickens, she can raise 50 chickens per year.(If she apportions some resources to each, then she can produce any linear combination of chickens and potatoes that lies between those extreme points.
	
Document Preview: Assignment Type: Individual Project   Deliverable Length: 2–3 pages    Suppose that two people, Michelle and James each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens.  If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of potatoes per year. If she devotes all her resources to raising chickens, she can raise 50 chickens per year. (If she apportions some resources to each, then she can produce any linear combination of chickens and potatoes that lies between those extreme points.  If James devotes all his resources to growing potatoes, he can raise 80 pounds of potatoes per year. If he devotes all his resources to raising chickens, he can raise 40 chickens per year. (If he apportions some resources to each, then he can produce any linear combination of chickens and potatoes that lies between those extreme points.)  PotatoesChickensMichelle20050James8040What is Michelle’s opportunity cost of producing potatoes? What is Michelle’s opportunity cost of producing chickens? What is James’ opportunity cost of producing potatoes?What is James’ opportunity cost of producing chickens?Which person has an absolute advantage in which activities?Which person has comparative advantage in potatoes?Which person has comparative advantage in chicken? Suppose that they are thinking of each specializing completely in the area in which they have a comparative advantage, and then trading at a rate of 2.5 pounds of potatoes for 1 chicken, would they each be better off? Explain. How would you extend the above narrative to businesses, society as a whole or nations? Explain. Please submit your assignment.For assistance with your assignment, please use your text, Web resources, and all course materials.Instructor Comments: We will cover the concepts and methods for calculations in chat. You should also read pages 25-33 in the textbook.  You will first need...

David · Accepted Answer

Assignment Type: Individual Project   Deliverable Length: 2–3 pages    
Suppose that two people, Michelle and James each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens.  If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of potatoes per year. If she devotes all her resources to raising chickens, she can raise 50 chickens per year. (If she apportions some resources to each, then she can produce any linear combination of chickens and potatoes that lies between those extreme points.  If James devotes all his resources to growing potatoes, he can raise 80 pounds of potatoes per year. If he devotes all his resources to raising chickens, he can raise 40 chickens per year. (If he apportions some resources to each, then he can produce any linear combination of chickens and potatoes that lies between those extreme points.) 
MICHELLE
JAmes
	200
	80
	50
	40
Potatoes
Chicken
•What is Michelle’s opportunity cost of producing potatoes? 
Opportunity cost refers to the next best use of a resource. So OPPORTUNITY COST of 200 potatoes is 50 chickens. OPPORTUNITY COST of 1 potato = ¼ chicken
For 1 P she has to give up ¼ C—so her Opportunity cost is ¼ C
•What is Michelle’s opportunity cost of producing chickens? 
As she has the choice of 50 C or 200P,

Assignment Type: Individual ProjectDeliverable Length: 2–3 pages Suppose that two people, Michelle and James each live alone in an isolated region. They each have the same resources available, and...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment