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Robinson Crusoe Economies

Robinson Crusoe Economies. Robinson Crusoe can do one of two things on his island--fish or grow corn It takes one hour to catch one fish. It takes two hours to produce one unit of corn. Robinson Crusoe Economy. 24 22 20 18 16 14 12 10 8 6 4.

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Robinson Crusoe Economies

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  1. Robinson Crusoe Economies

  2. Robinson Crusoe can do one of two things on his island--fish or grow corn It takes one hour to catch one fish. It takes two hours to produce one unit of corn.

  3. Robinson Crusoe Economy 24 22 20 18 16 14 12 10 8 6 4 Production frontier~ the absolute maximum that an economy can produce using all resources Fish 0 4 6 8 10 12 Corn

  4. So if it takes one hour to catch a fish and two hours to grow corn, what is the opportunity cost of Growing corn? Catching a fish? 2 fish ½ a corn

  5. One day… Robinson Crusoe meets a native that agrees to help him that he names Friday. Now he can do even more work.

  6. With Friday, Robinson can now do twice as much work and produce twice as much. Adding workers has caused his production frontier to double. 48 44 40 36 32 28 24 20 16 12 8 4 This was the old production frontier for Robinson by himself. Fish 0 4 8 12 16 20 24 Corn

  7. What happens to the new production frontier if…? 48 44 40 36 32 28 24 20 16 12 8 4 …Friday knows a faster way to catch fish? or …Robinson and Friday invent a net that helps them catch lots of fish at once? 0 4 8 12 16 20 24

  8. Friday is faster at catching fish? Specialization a net that helps catch lots of fish at once? Technology

  9. Specialization ~ to assign workers in an economy jobs that they are especially skilled at--leads to increased production Technology ~ any device or tool built to make work easier or more efficient

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