The comparative and absolute advantage on Rome using opportunity cost concept Concept Introduction: Opportunity Cost: It is the next best option available to a person. Opportunity cost refers to the benefits which are given up in the process of obtaining current result. Production Possibility Frontier (PPF): It is defined as the combination of all goods that can be manufactured efficiently with the available resources. It is also called production possibility curve. It may be increasing decreasing or constant in nature. Comparative Advantage: In a trade, a country has comparative advantages in producing goods when the opportunity cost of producing that good is less in comparative to the nation with which it is trading. Absolute Advantage: It is the capacity of a nation, firm or individual to produce output at very low cost per unit in comparison to other entity that produces same output.

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Respond to this post. Hello Professor, A rise in consumption in the economy would cause an increase in aggregate demand. Therefore, when consumers spend money on everyday goods and services, it not only helps to stimulate economic growth, but it could also present potential issues like unsustainable debt levels or inflation. I believe that it would be beneficial to consider such factors and adopt a purchasing strategy to help navigate the challenges posed by inflation or unsustainable debt levels. First, do you think our business will be affected because inflation is rising? How? Yes, I do believe that the business will be affected because of inflationary pressures. Inflation rising will affect the cost of goods, services, and labor, which could lead to higher operating expenses. The potential reduction of profit margin because of inflation could lead to a smaller percentage of revenue being retained as profit. Therefore, inflation rising will force us to raise prices for…

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Chapter 2, Problem 3P

To determine

The comparative and absolute advantage on Rome using opportunity cost concept

Concept Introduction:

Opportunity Cost: It is the next best option available to a person. Opportunity cost refers to the benefits which are given up in the process of obtaining current result.

Production Possibility Frontier (PPF): It is defined as the combination of all goods that can be manufactured efficiently with the available resources. It is also called production possibility curve. It may be increasing decreasing or constant in nature.

Comparative Advantage: In a trade, a country has comparative advantages in producing goods when the opportunity cost of producing that good is less in comparative to the nation with which it is trading.

Absolute Advantage: It is the capacity of a nation, firm or individual to produce output at very low cost per unit in comparison to other entity that produces same output.

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Respond to this post. Hello Professor, A rise in consumption in the economy would cause an increase in aggregate demand. Therefore, when consumers spend money on everyday goods and services, it not only helps to stimulate economic growth, but it could also present potential issues like unsustainable debt levels or inflation. I believe that it would be beneficial to consider such factors and adopt a purchasing strategy to help navigate the challenges posed by inflation or unsustainable debt levels. First, do you think our business will be affected because inflation is rising? How? Yes, I do believe that the business will be affected because of inflationary pressures. Inflation rising will affect the cost of goods, services, and labor, which could lead to higher operating expenses. The potential reduction of profit margin because of inflation could lead to a smaller percentage of revenue being retained as profit. Therefore, inflation rising will force us to raise prices for…

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