7/18/2019 Macroeconomics Problem Sheet
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If one party specializes in a certain thing thus minimizing the oppurtunity cost,that is comparative advantage. Absolute advantage is when one party can
produce something using less resources.
To vacuum one room he could've completed 2 loads of dishes
To wash one load of dishes he could've vacuumed
1/2 a room
To vacuum one room she could've washed one load of
dishes. So no oppurtunity cost
To wash one load of dishes she could've
vacuumed one room. So no oppurtunity costDebbie
Mike
Debbie
Mike
Debbie should vacuum and Mike should
wash dishes
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o clean one jail cell he could've cleaned
2 offices
To clean one office he could've
cleaned 1/2 jail cells
To clean one jail cell she could've cleaned 4/3 offices
To clean one office he could've cleaned
3/4 jail cellsHannah
Hannah
Andy
Hannah
Hannah clean the jail cells andAndy clean the offices
To make one computer the US could
make 1/3 cars
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To make one car Japan could make 5/3
computers
To make one computer Japan could
make 3/5 of a car
US
Japan
Japan
US
US make computers and
Japan make cars
Because if a country is self-sufficient they are
not actually maximizing it's productivity and
therefore (according to the 10 Principles ofEconomics) is going to lower the country's
standard o f living