Master 2
Storyboard Text
- Okkk.. Well how do we calculate the opportunity cost?
- John 26 2
- Eric 20 5
-
- 20/5=4
- Productivity Chart
- Fish
- 26/2=13
- Buckets of Water
- Eric 4 fish 1/4 BOW
- What do you divide by 5 to get 1?
- John 13 fish 1/13 BOW
- BOW Fish
- Opportunity Cost ----
- 5/20=1/4
- "1/13 is less than 1/4
- 2/26=1/13
- "4 is less than 13"
- Eric-I figured it out! I have a comparative advantage in carrying buckets of water from the lake to the shore. You have a comparative advantage in catching fish.
- John-So basically think of it as economic interdependence? We're better off by doing what we do best then trading at the end of the day?
-
- Eric-Yes exactly
- John-Let's start Tomorrow!
- John and Eric get straight to work the next morning. Jack specializes in catching fish.
- Eric specializes In getting buckets of fresh water to the shore.
- Eric 5 0
- John 0 26
- BOW Fish
- It's time to trade.. I'll give you 2 buckets of water for 10 fish.
- Eric 3 10
- John 2 16
- +2
- BOW Fish
- ok Lets do it! Wow we're definitely better of by specializing in what were best at and trading.
- +10
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