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					In-Class Project: The Production Possibilities Curve (PPC)


Directions:

Graph:
You will be assigned a group number from 1-5. Take the first country (on the left)
associated with the same number (above) as the question number you are assigned
(below). Ignore the second country (on the right) for now.

Once you have been assigned a group number, draw the graph with points A (before the
shock) and B (after the shock) as described. Fully label the graph including estimated
numeric values on x and y axes for points A and B. Label the axes according to the good
and units of that good specified in the data.

Your points A or B could be a variety of different places & you must choose only one.
Assume all examples start and end with output at potential –on the curve- unless
otherwise indicated.

You should use k for thousand and m for million. Use a curved PPC since this is a single-
country example.

*Explanation:
Say what is happening to the Land, Labor or Capital in your example to cause the change
described. Be specific to the industry, e.g. if the factor you want to say is causing the
shock you are given (below) is Labor, and the good is mechanical, maybe you say
something (be specific) is happening to affect employment of factory workers (or
whatever would correctly reflect the situation described).
Or as another example, if you wanted to use capital and the good is some kind of
clothing, you would say what’s happening with the sewing machines.
Use a curved PPC. In other words name at least one input - one thing you would need to
produce this good - and say what is happening to it to cause the shock you are assigned
(below).

   1.   Movement from inside to on the curve
   2.   Movement from on to inside the curve
   3.   Growth in the economy
   4.   Negative Growth in the economy
   5.   Potential output for computers doubles
Data: Countries and Their Maximum Output of Two Goods

1. Japan

(Daily)
45 ,000 cars
5 tons of gold

2. Saudi Arabia

(Daily)
8 million barrels of oil per day (MBPD oil)
80 Airplanes

3. Denmark

(Daily)
48,000 tons of cheese
12,000 customer service call center workers (cscw’s)

4. Guatemala

(Daily)
60,000 tons of oak lumber
30,000 tons of coal

5. France

(Hourly)
100 laptop computers
400 tons of coffee

				
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