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Snemalna Knjiga Besedilo

  • Hi sofia How is new york doing with their eggs and potatoes productions? 
  • Hi Gaby! We are doing good so far! How is Las vegas doing?
  • That's wonderful! We are doing good too! We now take 3 worker days per potato and 7 worker days per eggs
  • Wow! That's really good! We actually take 1 worker day per and 5 per potatos. 
  • WHAT?! HOW?! It seems like New york has an absolute advantage when producing both! 
  • Yes! We do! But if we look at our relative prices per eggs or potatoes . I bet you have a comparative advantage!
  • What does that mean? What is comparative advantage?
  • Well it's the relative price of goods, not in terms of labor but in terms goods, between two countries.
  • Hmmmm. Do you think you can give me an example?
  • Ofcourse! I can actually use our own numbers of the eggs and potatoes productions!
  • Okay! Sounds perfect! 
  • Okay! So We need to calculate the relative cost of eggs in terms of potatoes. Which is 3 worker days per eggs / 7 worker days per potato. That equals .43 potatoes per eggs .
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