ComparativeAdvantageandTrade2.2LEARNINGOBJECTIVEDescribe comparative advantage and explain how it serves asthebasis fortrade.@2015PearsonEducation,lnc11
LEARNING OBJECTIVE © 2015 Pearson Education, Inc. 11 Comparative Advantage and Trade 2.2 Describe comparative advantage and explain how it serves as the basis for trade
PPFsfor PickingApples and CherriesYou and your neighbor eachhave a limited time to pickcherriesand/orapples.Apples(pounds)If you spend your time picking20cherries, you can pick 20pounds of cherries.YourPpFCherries020(pounds)If you spend you time picking(a)Yourproductionpossibilities frontierapples, you can pick 20Figure 2.4aProductionpossibilitiesforyou and your neighbor,pounds of apples.withouttradeYouYourNeighborApplesCherriesApplesCherriesDevotealltime20poundsOpounds30poundsOpoundstopickingapplesDevotealltimeOpounds20poundsOpounds60poundstopickingcherries12@2015PearsonEducation,Inc
© 2015 Pearson Education, Inc. 12 PPFs for Picking Apples and Cherries You and your neighbor each have a limited time to pick cherries and/or apples. If you spend your time picking cherries, you can pick 20 pounds of cherries. If you spend you time picking apples, you can pick 20 pounds of apples. Production possibilities for you and your neighbor, without trade Figure 2.4a