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Worked-example setupScope and assumptions
- Rowan Advisory, Vale Analytics, and all quantities and exchange terms are fictional teaching facts from the linked dataset.
- The baseline and specialization bundles use the same one-day resource, fixed linear technology, output definitions, and quality threshold.
- The displayed totals precede exchange and omit contracting, switching, coordination, quality-verification, bargaining, tax, accounting, and distributional effects.
- Period
- One fictional analyst-day for each producer
- Units
- Completed outputs per combined analyst-days; proposed rate in forecast packages per reconciliation
- Rounding
- Exact ratios
Reconcile the production bundles
Before specialization, Rowan produces 8 reconciliations and 2 forecasts while Vale produces 3 reconciliations and 1 forecast. The combined baseline is therefore 11 reconciliations and 3 forecasts.
Under complete specialization in comparative-advantage outputs, Rowan produces 12 reconciliations and Vale produces 4 forecasts. The modeled combined bundle rises to 12 and 4: one additional unit of each output before exchange and implementation costs.
| Bundle | Reconciliations | Forecasts |
|---|---|---|
| Baseline total | 11 | 3 |
| Specialized total | 12 | 4 |
| Modeled change | +1 | +1 |
Test the proposed term
Rowan's cost of one reconciliation is 0.5 forecast. Vale's is 1 forecast. A proposed exchange term of 0.75 forecast per reconciliation lies strictly between those costs. In the frictionless model, Rowan can receive more than its 0.5-forecast sacrifice and Vale can pay less than the 1 forecast it would give up to produce the reconciliation itself.
That interval is a necessary model check, not a completed contract analysis. It does not specify quantity exchanged, legal terms, cash consideration, quality remedies, capacity commitments, tax, or accounting recognition.
Separate total gains from incidence
A larger combined bundle creates the possibility of gains. It does not prove that every owner, worker, client, creditor, or community benefits. The actual distribution depends on negotiated terms, ownership, adjustment costs, compensation, market power, and risk allocation. Some parties may lose even when the displayed total rises.
A defensible conclusion is therefore conditional:
The fixed linear model produces one additional unit of each output under the displayed specialization, and 0.75 forecast per reconciliation lies between the two opportunity costs. Further evidence is required to establish net realized gains, contractual feasibility, and their distribution.
Verified calculation · economics foundations analysis
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- comparative advantage
- 1 field
Inspect data
{
"rowan_vale": {
"output_a_name": "reconciliations",
"output_b_name": "forecasts",
"producers": {
"rowan": {
"baseline_output_a": 8,
"baseline_output_b": 2,
"max_output_a": 12,
"max_output_b": 6
},
"vale": {
"baseline_output_a": 3,
"baseline_output_b": 1,
"max_output_a": 4,
"max_output_b": 4
}
},
"proposed_b_per_a": 0.75
}
}Recomputed result
| Measure | Value |
|---|---|
| baseline total output a | 11 |
| baseline total output b | 3 |
| specialization change output a | 1 |
| specialization change output b | 1 |
| specialized total output a | 12 |
| specialized total output b | 4 |
| trade rate lower b per a | 0.5 |
| trade rate strictly between costs | 1 |
| trade rate upper b per a | 1 |