Fifth Edition Economics A Contemporary Introduction William A. McEachern Some Tools of Economic Analysis

1. Fifth EditionEconomics A Contemporary Introduction William A. McEachern Some Tools of Economic Analysis

2. Case 1: You are a faster typist and your roommate is a faster ironer. Output per Hour Each Does Own Each Specializes Typed Ironed Typed Ironed Papers Shirts Papers Shirts You 1 3 2 0 Roommate 1 0 0 12 Total 2 3 2 12 Exhibit 1a: Comparative Advantage: Maximizing Output 2 Some Tools of Economic Analysis

3. Case 2: You are a faster typist and a faster ironer, but you are a comparatively faster typist. Output per Hour Each Does Own Each Specializes Typed Ironed Typed Ironed Papers Shirts Papers Shirts You 1 3 2 0 Roommate 1 0 0 5 Total 2 3 2 5 Exhibit 1b: Comparative Advantage: Maximizing Output 3 Some Tools of Economic Analysis

4. Exhibit 2:The Economy’s Production Possibilities Frontier Some Tools of Economic Analysis

5. Exhibit 3a:Shifts in the Economy’s Production Possibilities Frontier (Increase in Available Resources) Some Tools of Economic Analysis

6. Exhibit 3b:Shifts in the Economy’s Production Possibilities Frontier (Decrease in Available Resources) Some Tools of Economic Analysis

7. Exhibit 3c:Shifts in the Economy’s Production Possibilities Frontier (Increase in Resources or Technological Advance that Benefits Consumer Goods) Some Tools of Economic Analysis

8. Exhibit 3d:Shifts in the Economy’s Production Possibilities Frontier (Increase in Resources or Technological Advance that Benefits Capital Goods) Some Tools of Economic Analysis