indifference curves and budget constraints to discuss the following: guns vs.
butter. In the Cold War, the US and the
Soviet Union had the choice of making consumer goods or military goods. The US had a huge GDP and large budget,
allowing it to spend on both types of goods.
The USSR was not as rich (smaller budget), and preferred more military
goods. How would these differences be
shown in indifference curves and budget lines.
Draw and discuss.