If Michelle devotes all her resources to growing potatoes, she can raise 200 lbs of potatoes per
Question:
If Michelle devotes all her resources to growing potatoes, she can raise 200 lbs 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, 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 lbs of potatoes per year.
If he devotes all his resources to taising 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.)
a. What is Michelle’s opportunity cost of producing potatoes?
b. What is Michelle’s opportunity cost of producing chickens?
c. What is James’ opportunity cost of producing potatoes?
d. What is James’ opportunity cost of producing chickens?
e. Which person has an absolute advantage in which activities?
f. Which person has a comparative?
Opportunity CostOpportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...
Step by Step Answer:
a Potatoes Chickens Michelle 200 50 James 80 40 Michelles opportunity cost of producing potatoes 50 ...View the full answer
