Question

In: Economics

Assume that both the United States and Germany produce beef and computers.

Assume that both the United States and Germany produce beef and computers. The U.S. can produce 200 computers or 1,000 pounds of beef per day. Germany can produce 500 computers or 250 pounds of beef per day.
Graph the PPCs for each country, putting computers on the horizontal axis. Then identify the slopes of the PPCs. What does the slope represent?

Expert Solution

2)

United States:

Computer	Beef
200	0
0	1000

*Use the above table in excel and through chart wizard option use XY scatter graph

Slope of PPC= Change in unit sacrificed / Change in unit gain

In US, To produce 200 units of Computer, producer need to sacrifice 1000 pounds of beef. So

Slope of PPC= -(1000)/200= (-)5

It implies that to produce an extra unit of Computer, producer need to sacrifice 5 pound of Beef.

Germany:

Computer	Beef
500	0
0	250

* Use the above table in excel and through chart wizard option use XY scatter graph

Slope of PPC= Change in unit sacrificed / Change in unit gain

In Germany, To produce 500 units of Computer, producer need to sacrifice 250 pounds of beef. So

Slope of PPC= -(250)/500= (-)1/2= (-) 0.5

It implies that to produce an extra unit of Computer, producer need to sacrifice 0.5 pound of Beef.

Rahul Sunny answered 2 years ago

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Assume that both the United States and Germany produce beef and computers.

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