Question

Instructions

Students have to create two hypothetical economies with their respective Production Possibilities Frontier (PPF).

Parameters:
One country should be a bigger economy in both industries.
Assume constant opportunity costs along each country’s PPF.

Thus, there are 5 tasks to complete this assignment:

1. Create a PPF for each hypothetical economy using 5 output combinations for each PPF
2. Graph the PPFs for the two hypothetical economies from a Production Possibilities Frontier schedule
3. Calculate the opportunity costs of producing goods in each industry for both countries (format: 2 x 2 table)
4. Determine the absolute and comparative advantage for each industry.
5. State the terms of trade.

This Excel assignment is intended to help students complete questions in a systematic and efficient way where the focus is on Economics-related concepts, not computations.

Submit an Excel file.

Answer 1