Friday, September 30th, 2011

Answers to the PPF problems at the end of the review packet:

Germany and Poland problem:

This is an output problem (Foregone item goes on top!)

Germany: 1500 computers, 500 tons of grain opportunity cost of computers (forego grain): 1/3 tons of grain, opportunity cost of grain (forego computers): 3 computers

Poland: 400 computers, 400 tons of grain, opportunity cost of computers (forego grain): 1 ton of grain, opportunity cost of grain (forego computers): 1 computer

In your PPF make sure you have the following:

-title

-axes labeled

-straight line frontiers

-frontiers labeled for each country

-numbers for amounts produced (Germany: 1500 computers, 500 tons of grain, Poland: 400 computers, 400 tons of grain)

Absolute advantage in computers: Germany (greater number of outputs with the same number of inputs)

Comparative advantage in grain production: Poland because the opportunity cost of producing grain is less for Poland than it is for Germany

If Poland could only produce one ton of grain/worker (100 tons of grain total), Poland’s opportunity cost of production would change.  The opportunity cost of producing computers for Poland would be 1/4 tons of grain.  The opportunity cost of producing grain is 4 computers.  Therefore, Poland would now have a comparative advantage in computer production because the opportunity cost of producing computers is less than Germany’s.

 

Argentina and Peru problem:

Argentina has a comparative advantage in beef production (opp. cost of beef is 1/2 fruit compared to Peru’s 1 fruit).

Peru will export fruit because it has a comparative advantage in fruit production (opportunity cost of fruit production is smaller for Peru than it is for Argentina).

The price of fruit, measured in beef, is between 1 and 2 metric tons of beef.

Absolute advantage in beef: Argentina because it can produce more beef with the same amount of inputs as Peru.

Monday, September 19th, 2011

Mapping Activity: Napoleon’s Grand Empire.

Use the maps below to color and label the maps you received for homework.