What is the marginal rate of transformation impact

Assignment Help Macroeconomics

Reference no: EM131941259

Assignment

For this assignment, our focus is on Production Possibilities Frontiers. We are comparing two countries: The United States and Brazil. You are given a situation that reads as follows:

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.

You are required to include a production possibility frontier for each country in your paper.

As well, you will need to answer a few questions...

• 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?

I'm looking between 800 words, roughly (+/- 200 words). Please remember that this assignment is due on Wednesday April 17th 2018 11:59pm(CST). Double space your paper and remember to use APA for citation (Author, Year).

Reference no: EM131941259

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