Meatballs Case Study Summary
No, it is not consistent because it only emphasizes on the absolute advantage American workers possess over Asian workers. It does not consider the fact that Asian workers may possess comparative advantage therefore banning imports may result to inefficiency.
Shoppers would see goods marked at higher prices than before this policy. In addition, previously discounted items may have higher prices.
Both legislations may yield same effects. American workers would be greatly affected by the increase in the cost of products. After the enactment of the legislation, companies would have to increase their prices in order to cater for the cost of production in America. Therefore, there will be decrease in consumption of these products by the middle …show more content…
The opportunity cost of producing 1 pound of meatballs is 3 / 5 of a pound of spaghetti in Tivoli. In Frivoli, the opportunity cost of producing 1 pound of meatballs is 4 / 3 pounds of spaghetti. 3/5 is lower than 4/3 indicating that Tivoli has lower opportunity cost in the production of meatball than in Frivoli thus it has comparative advantage in …show more content…
This makes them more consistent compared to the Frivoli.
The Frivoli tribe maintains absolute advantage in the production of spaghetti. This is because with or without the new production technique they have the ability to produce 40 pounds of spaghetti. This is an advantage to them because they are producing more spaghetti than Tivoli.
Tivoli has comparative advantage in meatball production. It would be more sensible if Tivoli produce meatballs. This tribe has the ability to produce more meatballs at a lower opportunity cost. Comparing the differences in the production of meatballs and spaghetti it would be more sensible if Tivoli handles meatball production.
Frivoli has comparative advantage in spaghetti production. Likewise, it would be more sensible if Frivoli tribe continue to produce spaghetti. They have the ability to produce more spaghetti compared to Tivoli tribe. Instead of putting their efforts in the production of more meatballs they should instead work together to ensure that the two tribes meet their full production potential. This would also minimize
Shoppers would see goods marked at higher prices than before this policy. In addition, previously discounted items may have higher prices.
Both legislations may yield same effects. American workers would be greatly affected by the increase in the cost of products. After the enactment of the legislation, companies would have to increase their prices in order to cater for the cost of production in America. Therefore, there will be decrease in consumption of these products by the middle …show more content…
The opportunity cost of producing 1 pound of meatballs is 3 / 5 of a pound of spaghetti in Tivoli. In Frivoli, the opportunity cost of producing 1 pound of meatballs is 4 / 3 pounds of spaghetti. 3/5 is lower than 4/3 indicating that Tivoli has lower opportunity cost in the production of meatball than in Frivoli thus it has comparative advantage in …show more content…
This makes them more consistent compared to the Frivoli.
The Frivoli tribe maintains absolute advantage in the production of spaghetti. This is because with or without the new production technique they have the ability to produce 40 pounds of spaghetti. This is an advantage to them because they are producing more spaghetti than Tivoli.
Tivoli has comparative advantage in meatball production. It would be more sensible if Tivoli produce meatballs. This tribe has the ability to produce more meatballs at a lower opportunity cost. Comparing the differences in the production of meatballs and spaghetti it would be more sensible if Tivoli handles meatball production.
Frivoli has comparative advantage in spaghetti production. Likewise, it would be more sensible if Frivoli tribe continue to produce spaghetti. They have the ability to produce more spaghetti compared to Tivoli tribe. Instead of putting their efforts in the production of more meatballs they should instead work together to ensure that the two tribes meet their full production potential. This would also minimize