Comparative Advantage : Discuss the Comparative Advantage (With Trade) simulation that you played in Module Two. You
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- Comparative Advantage: Discuss the Comparative Advantage (With Trade) simulation that you played in Module Two. You should add the Production Decisions graph and the Production Trade graph (i.e., the graph showing how many hamburgers per fries) from you simulation report into the project template as Figures 1.1 and 1.2. Then, answer the following questions in the paragraphs below the figures:
- How does this simulation demonstrate how individuals evaluate opportunity costs to make business decisions? Use the Production Decisions graph from the simulation as a reference to explain what role the production-possibility frontier (PPF) has in the decision-making process.
- Explain how comparative advantage impacts a firm's decision to engage in trade. Would a business's decision to trade cause a change to its PPF? Provide specific reasoning to support your claims.
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