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Comparative Advantage Examples

Comparative Advantage Examples. Frank and George. Frank George. Frank and George. How much can Frank and George produce in 8 hours spending 4 hours on each task? Can Frank and George produce more by working together and trading? Why?. OPPORTUNITY COST!!!. Sam and Jerry. Sam Jerry.

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Comparative Advantage Examples

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  1. Comparative AdvantageExamples

  2. Frank and George Frank George

  3. Frank and George • How much can Frank and Georgeproduce in 8 hours spending 4 hours on each task? • Can Frank and George produce more by working together and trading? • Why? • OPPORTUNITY COST!!!

  4. Sam and Jerry Sam Jerry

  5. Sam and Jerry • How much can Sam and Jerry produce in 8 hours spending 4 hours on each task? • Can Sam and Jerry produce more by working together and trading? • Why? • OPPORTUNITY COST!!!

  6. If Sam and Jerry can benefit from Trade then why can’t countries benefit from trade……. U.S.am Japanerry Sam Jerry Both countries benefit from trade…………. In business this is called a WIN – WIN!!!

  7. Principle of Comparative Advantage • Country - gain by importing a good • Even if - produced more efficiently at home • Enable country – specialize • Produce goods – more efficient • Less efficient country – specialize • Export goods – least inefficient

  8. Comparative Advantage • Greater productivity • Need system of exchange (Trade) • Increased standards of living

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