ECON310: The Production Possibility Frontiers For Brazil

ECON Name: Instructor: Institution: Date: What would be the production possibility frontiers for Brazil and the United States? The essence of a production possibility frontier is to basically illustrate and analyze the tradeoffs and hence the resultant opportunity costs of every good produced that come with the same (Kishore, 2014).So, using the data provided for the respective countries, the possibility frontier can clearly be illustrated. For the case of Brazil, the data can be tabulated as below: Clothes Soda 0 50 50 25 100 0 The above data can then be further illustrated on a graph, as follows (A graph of clothes versus soda in 000s) 11550661619250012255501642745 120650023050500Clothes 100 26479502978150050 1117600539740002550 Soda The same can be illustrated both tabular and graphically for the case of the U.S. Clothes Soda 0 250 32.5 125 65 0 245745013335008445501289050869950222249812800-27940080010024511000065 32.5 0125250 Using what you have learned and any independent research you may conduct, which product should each country specialize in, and why? In order to clearly compare and give some economic opinion about the specialty of each country in this case, it is important to introduce the concept of comparative as well as absolute advantage (Schumacher, 2012). As can be observed, the two countries clearly have some sort of strengths and weaknesses when it comes to the production of each good. The respective costs of production of each good in each of these two countries vary. When it comes to the production of clothing in the U.S, the cost is 32.5/12.5 which returns 0.26. For the same in Brazil, it is 50/25 which returns 2. With just these two results, it is evident that Brazil needs to focus much of its efforts in the production of clothing, while the U.S should look more at soda production. Without trade, the PPF graphs for each of these countries is as indicated: What is the labor-intensive good? A labor intensive good is that which would call for the use of a lot of manpower or labor to produce. In this case, it is quite open and clear that clothing is the most labor intensive good. In the process of making clothing, there is the use of manpower in virtually all the stages of its production. This is not the cause when it comes to the production of soda, since it is mostly an automated process all through until packaging. What is the Marginal Rate of Transformation impact? This is quite similar to the production possibility frontier, since it refers to which good can be traded off or sacrificed for the sa...