potatoes chickens

MICHELLE 200 PER YEAR 50 PER YEAR

jAMES 80 PER YEAR 40 PER YEAR
What is michelles opportunity cost of p
roducing potatoes
WHAT is MICHELLES OPPORTUNITY COST of producing chickens
repeat same opportunitity cost for
James
WHICH PERSON MICHELLE OR jAMES HAS COMPARATIVE ADVANTAGE IN POTATOES OR CHICKENS
Suppose that theyare thinking of each specializing completely in the area in which they have a comparative advantage, and then trading at a rate of 2.5pounds of potatoes for 1 chicken, would they each be better off ,explain
How would you explain the above narrative to businesses, society as a whole nation explain

To calculate Michelle's opportunity cost of producing potatoes, we need to look at the trade-off between producing potatoes and producing chickens. Michelle produces 200 potatoes per year but only produces 50 chickens per year. Therefore, for every 1 potato she produces, she gives up the opportunity to produce 4 chickens. So, her opportunity cost of producing potatoes is 4 chickens.

Similarly, Michelle produces 50 chickens per year but only produces 200 potatoes per year. Therefore, for every 1 chicken she produces, she gives up the opportunity to produce 0.25 potatoes. So, her opportunity cost of producing chickens is 0.25 potatoes.

Now let's look at James. He produces 80 potatoes per year and 40 chickens per year. Therefore, his opportunity cost of producing potatoes is 0.5 chickens (for every 1 potato he produces, he gives up the opportunity to produce 0.5 chickens). His opportunity cost of producing chickens is 2 potatoes (for every 1 chicken he produces, he gives up the opportunity to produce 2 potatoes).

Comparative advantage is determined by comparing opportunity costs. Michelle has a lower opportunity cost for producing chickens (0.25 potatoes) compared to James (2 potatoes), and James has a lower opportunity cost for producing potatoes (0.5 chickens) compared to Michelle (4 chickens). Therefore, Michelle has a comparative advantage in producing chickens, and James has a comparative advantage in producing potatoes.

If they specialize completely in their areas of comparative advantage and trade at a rate of 2.5 pounds of potatoes for 1 chicken, they would both be better off. Michelle can produce chickens more efficiently, so she can obtain more potatoes in exchange for her chickens. James can produce potatoes more efficiently, so he can obtain more chickens in exchange for his potatoes. By specializing and trading, they can both increase their overall production and consumption.

To explain this narrative to businesses, society, or a nation as a whole, you can emphasize the concept of comparative advantage and the benefits of specialization and trade. By focusing on areas where they have a comparative advantage, individuals or businesses can produce more efficiently, leading to increased overall productivity. Through trade, they can then exchange their surplus goods or services for the goods or services they have a higher opportunity cost in producing, thus benefiting all parties involved and promoting economic growth.