2-2 Discussion: Comparative AdvantageFor this discussion, read the advice article by economist Emily Oster entitled “You’re dividing the chores wrong.” Oster argues for an approach to household chores that is informed by economic principles. She shows how family economic decisions can be like how businesses make production decisions.
In your initial post, consider how her advice might apply to division of labor or outsourcing of products in a business. Specifically, address the following:
- Research an example of a company that leverages comparative advantage. In other words, find and share an example where a firm either hires specialized workers or outsources production to increase output. The following is a partial list of examples to help your search:
- An accounting firm hiring bookkeepers to perform day-to-day tasks so that the CPA can focus on higher-order work
- An auto manufacturer purchasing the parts needed to assemble a vehicle from other firms
- A restaurant purchasing the ingredients for their recipes rather than growing them
- A clothes manufacturer outsourcing the cotton or fabric needed to produce clothes
- Using the production-possibility frontier (PPF) model as a reference, explain what the benefits of specialization and trade are for your selected company and for society. Be sure to highlight the changes in overall output and consumption created by trade.
In your responses, comment on the posts of at least two peers by drawing parallels between the example they shared in their initial post and how chores are divided in your household. Alternatively, you can compare their example to how tasks are assigned in your workplace to increase output.
To complete this assignment, review the Discussion Rubric.
