Week 2 Assignment – Micro Economics
Week 2 Assignment
Comparative Advantage
R/C Aero Specialties produces unmanned aerial vehicles (UAVs), or drones, for commercial and recreational uses. The company has updated its design to compete with Fuji Enterprises, but its production costs for this new model require a retail price that is well above the retail price for the Fuji model. If R/C Aero is to remain competitive with Fuji, the company must develop and implement strategies to gain a comparative advantage.
Submit by Day 7 a 300- to 700-word paper that addresses the following scenario:
Assume that you have been hired as a consultant to identify and refine a strategy for R/C Aero Specialties. Identify, describe, and justify at least one strategy that R/C Aero can implement to gain a comparative advantage over Fuji. Explain why you believe this strategy will give R/C Aero a comparative advantage, thus enabling the company to regain and maintain market share.
Assignments must bein APA style and format. Information on APA style is available at theWalden Writing Center.
| In addition to fully answering the assignment’s questions, each Assignment will be evaluated for clarity of writing, critical analysis of the issues, proper use of references to support the positions taken, and adherence to APA standards |
Required Resources
Readings
- Frank, R. H., & Bernanke, B. S. (2010). Principles of microeconomics, brief edition (2nd ed.). New York, NY:McGraw-Hill/Irwin.
- Chapter 2, “Comparative Advantage” (pp. 35–59)
Chapter 2 introduces the concept of comparative advantage. The chapter describes the production possibilities curve and the production possibilities model to illustrate how specialization enhances the productive capacity of an economy.
Focus on the principle of comparative advantage, along with the given examples. In addition, concentrate on the production possibility curve and how it is affected by individual productivity.
- Chapter 2, “Comparative Advantage” (pp. 35–59)
Media
- Kahn Academy. (2014c). Comparative advantage specialization and gains from trade [Video file].
Note: The approximate length of this media piece is 9 minutes.
- Kahn Academy. (2014b). Comparative advantage and absolute advantage [Video file].
Note: The approximate length of this media piece is 10 minutes.
Optional Resources
- Frank, R. H., & Bernanke, B. S. (2011). Principles of microeconomics, brief edition (2nd ed.) [Supplemental material].
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