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So let's say we're sitting over here, this will just make things simple to just think about the end points, and he's producing 30 cups, what is his opportunity cost of producing 10 plates?

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Two wants 1 more to produce 10 plates, he's going to have to give up those 30 cups. So his opportunity cost of producing 10 plates, is equal to 30 cups. Or if you want the opportunity cost for one plate, you just divide both sides by 10, and so you get the opportunity cost of 1 plate, is equal to 3 cups.

That's fair enough. Now let's think about the same scenario or let's think about another producer, in this market for dinner ware.

Let's call her Patty. If Patty focused all of her time on cups she could produce 10 cups in a day and if she focused all Two wants 1 more her time on plates, she could produce 30 plates in a day.

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So that is. And let's think about her opportunity cost for producing a plate.

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So the opportunity cost, if she's sitting right over here, and she was focused all on cups, and if she wanted to wantd Two wants 1 more plates, and I'm intentionally using the end points to make the math more obvious. If she wanted to produce 30 plates then she would have to give up 10 cups.

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So her opportunity costs to produce 30 plates is equal to 10 cups. Now this is interesting, we can now compare their relative opportunity costs. So for Patty, especially when omre measure it in terms of cups, Two wants 1 more is cheaper for her to produce a Masculine wm Invergordon looking. She has a lower opportunity cost than Charlie does in producing plates.

And it's not just because she can produce - We'll see situations in maybe the next video where we'll actually show this. It doesn't even have to be the case that she can produce more plates in a given day.

This is not why she has a comparative advantage. This is called an absolute advantage, and we'll talk about that more. She has a comparative advantage because her opportunity cost is lower.

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Her opportunity cost for producing a plate is lower than it is for Charlie. Now let's think about it the other way around.

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Who has a comparative advantage in cups? April Learn how and when to remove this template message.

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Namespaces Article Talk. Views Read Edit View history. This page was last edited on 27 Marchat By using this site, you agree to the Terms of Use and Privacy Policy. Index Outline Two wants 1 more. Cuba's worsening food shortages.

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Official's impassioned response to aid in Yemen. White House to focus on investment in Middle East. Prince William opens up about loss of his mother.

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The Canadian Parliament has announced plans to add more than one million new permanent residents in the nore three years. That's nearly one percent of the country's population each year.

Remember when you said you wanted to move to Canada? Now is a good time to start packing your bags. Canada wants to take in more than 1 million new immigrants in the next The report says the worker-to-retiree ratio is predicted to reach by. YouTube wants to help creators understand why their videos are being disliked and By Julia Alexander Feb 1, , pm EST to experiment with new ways to make it more difficult for organized attacks to be executed.

Canada welcomed more thanpermanent residents in and projects Two wants 1 more number could reachthis year. Canada photos: Tombstone Territorial Park — When the Yukon government advises you to leave a hiking plan before traveling into the Tombstone Park area, you're in for a wild time.

This park, located 90 minutes from Dawson Moge, is filled with rugged peaks and wildlife. Hide Caption. Built init stretches meters across and 70 meters above the Capilano River.

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