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Microeconomics Business Potatoes

By:   •  November 30, 2012  •  Essay  •  306 Words (2 Pages)  •  835 Views

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In the situation, Michelle's opportunity costs of potatoes are two hundred potatoes compared to James having produced eighty potatoes. Michelle's opportunity cost of chickens is fifty as compared to James forty every year. In conclusion, Michelle has the biggest advantage over James having more potatoes and chickens.

A ratio that I came up with for Michelle is that for every four potatoes that she produces is equal to only one chicken. The ratio for James is for every two potatoes that he produces, is equal to only one chicken. If Michelle wanted to completely dedicate her resources to producing potatoes and chickens, she has a comparative advantage of trading at a rate of 2 ½ pounds of potatoes per chicken, she would have four, and multiplied by 2 ½ of potatoes per chicken.

James could completely dedicate his resources in producing potatoes and chickens in which he has a comparative advantage while trading at a rate of 2 ½ pounds of potatoes per chicken, he would ½ of one, and multiplied by two and a half pounds of potatoes per chicken which equals ¼.

Michelle has a

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