Assume that both the United States and Germany produce beef and computers. The U.S. can produce 200 computers or 1,000 pounds of beef per day. Germany can produce 500 computers or 250 pounds of beef per day. Graph the PPCs for each country, putting computers on the horizontal axis. Then identify the slopes of the PPCs. What does the slope represent?
What will be an ideal response?
Graphs should show:
Germany: horizontal intercept = 500, vertical intercept = 250, slope = -1/2.
U.S.: horizontal intercept = 200, vertical intercept = 1,000, slope = -1/5
The slope of the line represents the opportunity cost of the good on the horizontal axis (computers).
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