Chronicles Of John and Ken
Montāžas Teksta
- Yeah I heard.. We got to get started Working before it gets too late.
- John and ken are 2 best friends that like to explore learning stuff together.
- HEY Ken! have you heard what we have to do today?
- *exploring the room*
- Roger that!
- For sure... Lets get on it..
- Sure! Teach me whatever you can.
- So here we are... do you mind if I teach you somethings new that I learned 2 weeks ago?
- Hmm.... what's that?
- So first.. In class we learned about something called comparative advantage and absolute advantage.
- Got it.. So what does the comparative advantage mean?
- John: 15
- Ken: 30
- Chairs
- Productivity Chart
- Tables
- The absolute advantage is the condition when someone can produce more of a good or service using fewer resources than someone else..
- Ken: 30
- John: 3
- wow! I never knew of these terms before... how do we find out who has the comparative advantage john?
- The comparative advantage is the condition that someone can produce a good or service at a lower opportunity cost than someone else
- Hmm...what is the opportunity cost?
- We have to take a look at something called the opportunity cost chart.
- Ok...so what do we do with this??
- The opportunity cost is the loss of potential gain when something is chosen over another.
- *
- Let's take a look at the chart.. shall we?
- 1 Table (Ken)
- 1/5 Tables(John)
- 1 chair
- Opportunity cost Chart
- 5 chairs(John)
- 1 Chair(Ken)
- 1 Table
- Well it looks like i won the comparative advantage for tables.. (1 chair per table)
- Now that we have taken a look at the chart.. we can find out who has the comparative advantage simply by looking at who has the lower opportunity cost.
- No way!
- You sure did! But guess what? I have the comparative advantage for chairs (11/5)
- What's that?
- Now that we got those terms out the way... Lets talk about something called specialization.
- Ok.. how can we find out who specializes in what goods and services?
- Specialization is a good development of skills or knowledge in one aspect of a job or field of interest.
- Lets find out!
- Well.. we can find out who specializes in what by simply looking at who has the comparative advantage in the activity..
- So.. will that mean that I specialize in Tables since the ratio is (51)
- From taking a look at the chart, I should specialize in chairs because my opportunity cost is lower.
- Is specialization comorbid with any other terms?
- Yes, Ken!!! You're getting this!
- what is the division of labor? and why?
- Specialization definitely goes hand in hand with division of labor.
- Got that..
- The division of labor is the allocation of separate tasks to different people. why? because Division of labor in the production of a good or service is based on the principle of specialization
- what is economic interdependence??
- Another thing.. Specialization encourages trade and trades lead to something called interdependence..
- Sounds interesting.. Thanks john! You taught me Alot of valuable information today!!
- When we specialize and we trade, we depend on other people or on other things to produce many of the goods or services we want. Which is what economic interdependence basically is.
- what is economic interdependence??
- Another thing.. Specialization encourages trade and trades lead to something called interdependence..
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