Essays on Marginal Rate

The production possibility frontier for Brazil depicts the maximum outputs of clothing and soda that the country can produce simultaneously with given combination of inputs as well as other factors of production. Ideally, the production possibility frontier shows the optimal production points of the economy at any point for the two products. Point E in the graph below denotes the optimal production point for both products. Additionally, the slope of the graph at point E reflects the marginal rate of transformation in Brazil. This denotes the rate at which the production of clothing can transform into the production of ...

Within the economic environment, the production possibility frontier theory reveals that companies and countries are limited to a specific volume of production especially with the type of technology available to them (Becerra, 2009, p.12). Huff et al. (2009, p.81) revealed that countries usually have a limited number of products that they can produce within their manufacturing facilities due to raw materials, labor, and manufacturing overhead constraints (Huff et al., 2009, p.81). Therefore the maximization of the production possibility frontier of each country or firm is primarily based on the available resources as well as its production experience (Becerra, 2009, ...

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.

What would be the production possibility frontiers for Brazil and the United States?

Without trade, the United States produces ...