Suppose that two people, Michelle and James each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens. If Michelle devotes all her resources to growing potatoes, she can raise 200 pounds of potatoes per year. If she devotes all her resources to raising chickens, she can raise 50 chickens per year. (If she apportions some resources to each, then she can produce any linear combination of chickens and potatoes that lies between those extreme points. If James devotes all his resources to growing potatoes, he can raise 80 pounds of potatoes per year. If he devotes all his resources to raising chickens, he can raise 40 chickens per year. (If he apportions some resources to each, then he can produce any linear combination of chickens and potatoes that lies between those extreme points.)

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To compare Michelle and James' production possibilities in terms of potatoes and chickens, we can create a production possibility frontier (PPF) for each of them. The PPF represents the combination of goods that can be produced given the available resources and technology.

For Michelle:
- If she devotes all her resources to growing potatoes, she can produce 200 pounds of potatoes per year.
- If she devotes all her resources to raising chickens, she can produce 50 chickens per year.

For James:
- If he devotes all his resources to growing potatoes, he can produce 80 pounds of potatoes per year.
- If he devotes all his resources to raising chickens, he can produce 40 chickens per year.

Now let's plot the PPF for each person on a graph. We'll put potatoes on the x-axis and chickens on the y-axis.

For Michelle, plot the points (0, 50) and (200, 0). These are the extreme points of her PPF.

For James, plot the points (0, 40) and (80, 0). These are the extreme points of his PPF.

Now connect the dots for each person to create two lines on the graph. These lines represent the maximum combinations of potatoes and chickens that each person can produce given their resources.

To compare their production possibilities, we can see that Michelle's PPF is steeper than James' PPF. This means that Michelle has a comparative advantage in growing potatoes because she can produce more potatoes compared to the chickens she can produce. On the other hand, James has a comparative advantage in raising chickens because he can produce more chickens compared to the potatoes he can produce.

Comparative advantage refers to the ability to produce a good or service at a lower opportunity cost compared to another person or country. In this case, Michelle has a lower opportunity cost of producing potatoes, and James has a lower opportunity cost of producing chickens.

By understanding each person's comparative advantage, they can specialize in the production of the good where they have a lower opportunity cost and then trade with each other to benefit from the other person's specialization. This allows both Michelle and James to consume a combination of goods that is beyond their individual production possibilities.