[Econ] Comparitive Advantage?
The following is how much one person can catch in a day
Person A: 6 Fish, 4 Rabbits
Person B: 8 Fish, 2 Rabbits
a) How much will they produce in one day if they specialize? b) If they specialized as the comparative disadvantage?
What I have figured out so far:
Person A specializes in Rabbits and vice versa. I am just unsure how to calculate it. If you could include the calculation (in fraction form) and explain it would be much appreciated! Thank you!
Update:If they specialized, wouldn't a person only dedicate themselves to producing ONE resource? I am kind of confused...
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a. 6fish 2 rabbits, or 8 fish 4 rabbits.I guess the latter one.
b the opportunity cost of A is 1 fish=4/6=0.67rabbits,or 1 rabbit=6/4=1.5 fish.
And B, 1 fish=2/8=0.25 rabbits,or 1 rabbit=8/2=4 fish.
A has the lowest cost to produce rabbit,while B has the lowest cost to produce fish.Based on this fact, A will produce 4 rabbits,while B will produce 8 fish.