Comparative Advantage – Notes

With this production possibilities table, we can directly mark off the vertical and horizontal intercepts on the Grapes and Nuts axes.

But some textbooks instead give you a table that lists the data in terms of time required per unit of output. This table is in fact a mathematical transformation of the above table. To get this “time per unit output” table, we simply compute the reciprocal of each of the above cell values and rename the table title:

So, if you are given the “time per unit output” table, you simply compute the reciprocal of each of the table cells to obtain the “output per unit time” table. Then you are once again ready to plot the individual PPC’s.

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