Who can produce more?

timer Asked: Oct 17th, 2018
account_balance_wallet $9.99

Question Description

Suppose that there are two products: clothing and soda. Both Brazil and the United States produce each product. Brazil can produce 100,000 units of clothing per year and 50,000 cans of soda. The United States can produce 65,000 units of clothing per year and 250,000 cans of soda. Assume that costs remain constant. For this example, assume that the production possibility frontier (PPF) is a straight line for each country because no other data points are available or provided. Include a PPF graph for each country in your paper. Chapter 5 of the Suranovic text is a good reference for this task.

Complete the following:

  • What would be the production possibility frontiers for Brazil and the United States?
  • Without trade, the United States produces AND CONSUMES 32,500 units of clothing and 125,000 cans of soda.
  • Without trade, Brazil produces AND CONSUMES 50,000 units of clothing and 25,000 cans of soda.
  • Denote these points on each COUNTRY’s production possibility frontier.
  • Using what you have learned and any independent research you may conduct, which product should each country specialize in, and why?

To assist in your thinking and discussion, additional questions to consider include:

  • What is the labor-intensive good?
  • What is the Marginal Rate of Transformation impact?
  • What is the labor-abundant country?
  • What is the capital-abundant country?
  • Could trade help reduce poverty in Brazil and other developing countries?

Deliverables 800-1000 word

Tutor Answer

School: Duke University



Production Possibility
Student’s Name
Institutional Affiliation



Production possibility

The production possibility frontiers for Brazil and the USA
According to the concepts of absolute along with the comparative advantages the United
States of America have to specialize in the production of soda (1 can of soda costs here
32,5/125=0.26 units of clothing, and in Brazil, it costs 50/25=2 units of clothing). Brazil should
specialize in the production of clothing (one unit of clothing costs here 25/50=0.5 can consist of
soda, and in the United States of America it costs 125/32, 5=3.85 cans of soda).



From the above figure shown, without trade production of point of Brazil and the US has
been presented as point A and B respectively.
Therefore, for Brazil, the rate of Marginal transformation = 100,000/50,000 = 2 units of cloth.
Thus, In Brazil, 2 units production of clothing
require to be given up to produce the additional unit of the soda can. In the same way, for the
United States, the rate of Marginal transformation is equal to= 65,000/250,000 = 0.26 units of
In the USA, 0.26 unit are only units of clothing that are produced and at the same time
are required to be given up to produce the extra soda can. The labor-intensive good in other
hand is where an industry that requires greater labor volume costs in the production as d...

flag Report DMCA

Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

Similar Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors