production possibilities frontiers for the U.S. and Mexico

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There are 2 countries, the U.S. and Mexico, that produce 2 goods, manufacturing and agriculture. Manufacturing output in the U.S. is a function of labor and capital inputs. Agriculture output in the U.S. is a function of labor inputs only.

Manufacturing output in Mexico is a function of labor input only. Agriculture output in Mexico is a function of labor and capital.

Manufacturing is capital intensive and agriculture is labor intensive. The U.S. is relatively more capital abundant.

My problem: What do the production possibilities frontiers for the U.S. and Mexico look like?

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Solution Preview

Hello,

I cannot draw a graph in this box; however, I can explain the concepts. Because labor is the only input that both commodities share for both countries the PPF curve would still be a curve, which indicates the diminishing ...

Solution Summary

What the production possibilities frontiers for the U.S. and Mexico look like are determined.

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