ECON 1B03 Study Guide - Midterm Guide: Comparative Advantage, Average Cost, Productive Efficiency

• School: McMaster University
• Department: Economics
• Course: ECON 1B03
• Professor: Hannah Holmes

Document Summary

What goods and how much to produce. What resources should be used in production. Firms: produce and sell goods and services, hire and use factors of production, households, buy and consume goods and services, own and sell factors of production. For example, you always give up 50 bushels of wheat to produce 10 tonnes of carrots. Opp. cost of opp. cost of a potato a meat. Rodgers meat 2 potatoes: peyton has a lower opportunity cost of producing potatoes, we say peyton has a comparative advantage in potatoes, rodgers has a lower opportunity cost of producing meat, rodgers has a. Productivity = quantity produced number of inputs used. Lead to increase in consumers, will increase demand: demand schedules are tables that show the relationship between price and quantity demanded for a good. 6: price jerry"s qd chris" qd market d, $. 00 12, . 50 10, 1. 00 8 5, 1. 50 6 4, 2. 00 4 3, 2. 50 2 1.