What would the production possibility frontiers be 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?

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Each country ought to specialize in making whichever product costs its economy relatively the least. We can define such a cost in many terms; popular definitions include the lost opportunity to make other things of value to the economy or an economy's allocation and production efficiencies.

The United States, at its most efficient economic state, is utilizing soda at a rate nearly four times greater it does clothing: 125,000 sodas : 32,500 units of clothing = ~3.846:1.

Brazil, on the other hand, is said to utilize soda only half as much as clothes at its own optimal PPF state: 25,000 sodas : 50,000 clothes = 1:2.

Sometimes these ratios are expressed as the "slope" of the respective nations' PPF functions, but more generally, they represent the relative value each commodity has to one another within said country. If each nation ought to specialize in producing that which it...

(The entire section contains 2 answers and 448 words.)

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