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?
Solutions
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 agoRelated Solutions
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