Comparative advantage comic strip
Storyboard Text
- Hey Joe, whatcha up too? I have a business proposal if you're interested.
- Sure!
- Hey Jade ,I've been busy running my new shop, And of course I'd be willing to listen to your proposal. Let's step in my office shall we?
- So I've been looking at our numbers and you hold the absolute advantage in producing electric cars because you produce 90 more cars than I do. I make 110 and you make 200. I, however, hold the absolute advantage in producing hybrid cars because I produce 50 more than you do, I produce 200 hybrid and you, 150. This trade could bring many great benefits!
- Electric HybridJoe200150Jade110200
- Hmm.. That's quite intriguing, because of what I learned in my economics class let's look at our opportunity cost.
- Electric HybridJoe150/200= 3/4200/150= 4/3 Jade200/110= 20/11110/200= 11/20
- I mean how much does it cost me to produce 1 electric car and 1 for you also? We'll compare the opportunity cost for producing 1 electric car each and then hybrid cars next.
- Wow that's deep. You're really diggin. The use of our machinery with the division of labor reduced the required skill level of workers.
- Electric HybridJoe130+ 1053 + 7Jade55 + 5100+ 40 185+200= 200 153+47=200
- When we work independently we make a total of 153 Hybrid cars and 185 electric cars.
- Yes! But if we specialize we can produce 200 hybrid cars a day and 200 in electric cars using the comparative advantage we can produce more.
- There you go. Your getting it. With the combination of results from the data presents the economic interdependence of both products over time between trade.
- So I think the best solution would be to trade with one another.
- What do you say? Do we have a deal?
- YES! NEW PARTNERS!!
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