1 / 4

Efficiency in Division: The Concept of Comparative Advantage Explained

Explore the concept of comparative advantage in economics, why specialization is beneficial, and how it leads to increased efficiency. Real-life scenarios explain the concept, along with diagrams to help illustrate.

sakura
Download Presentation

Efficiency in Division: The Concept of Comparative Advantage Explained

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Warm-Up If you were a contractor building a new house, which people would you need to hire? Why wouldn’t one contractor just do everything on his/her own?

  2. Comparative Advantage: The ability to produce something at a lower opportunity cost than other producers. Law of Comparative Advantage The individual with the lowest opportunity cost for producing a particular good should specialize in the production of that good.

  3. Who should specialize in what? Example: Should Mrs. X Grade Her Own Papers? Mrs. X can grade 50 tests in one hour, but she can also spend that time tutoring a student for $100/hour. Her TA can grade 25 tests in one hour or use that time scooping ice cream for $8/hr. Opportunity Cost for teacher to grade papers? Opportunity Cost for student to grade papers?

  4. In Groups • Define the concept • Include an example/real life scenario • Create a diagram/drawing to represent the concept.

More Related