in economics (i mean EC 205) we have the "macroeconomics" consumption curve as follows.



And we have a different curve for an individual. It's impractical, but gets the point across to use guns and butter, assuming that 1 kg of butter costs $4 (and there are no other living costs) and one gun costs $5, and you eat only butter and your only source of enjoyment is admiring your gun collection (made of one kind of gun that costs $5). You can buy so much of each kind each month with your income of $20. Your consumption curve is exactly as follows.



The problem i have is this, why do they make the macroeconomics guns butter curve as a 1/4 circle? The answer given is the diminishing marginal value (i think), but i have a problem with that. That is to say that the first gun you buy in a fully agricultural economy is free by the first order taylor series expansion. a gun is never free. If i were to make the gun/butter curve for a country, it would look about the same as the curve for an individual with the provision that if you don't make enough butter for people to eat they all die, but beyond that it should be a straight line.

In Japanese economics, the teacher presented this curve:



Now, i think the WW2 comsumption trend for japan looks like a straight line. According to economics, it's a 1/4th circle. Even my japanese economics teacher says it's a 1/4 circle. He says you can see the curvature in that graph above. IT LOOKS LIKE A STRAIGHT LINE. What do you think? Do you think it looks like a straight line, do you think this is inapplicable (wtf)? Please reconcile this issue.

[Edited on January 26, 2006 at 11:40 PM. Reason : ]

1/26/2006 11:37:38 PM

Damnit why are you posting this?

Everyone in here has taken EC205 and doesn't need any introductory lesson to whatever basic over-simplified stuff that will follow.

(No offense, seriously, it's just that, like, everyone takes that class.)

1/26/2006 11:47:37 PM

everyone takes that class so i'm not gona start off with BS, my post, is do you think that fucking butter vs. guns curve is BS?

1/26/2006 11:48:43 PM

It's just an example of an economics chart that was turned into another oversimplified EC205 graphic. There are real "guns & butter" curves, then there are ones that they use in economics classes to get the kid's attention because "guns" is a more interesting product than "bananas."

1/26/2006 11:53:26 PM

Quote :

"There are real "guns & butter" curves"

pics?

[Edited on January 26, 2006 at 11:57 PM. Reason : as if i hadn't posted one...]

1/26/2006 11:57:35 PM

Yeah, that's a real one.

Then there's the fake ones that they show you in class.

1/27/2006 12:01:55 AM

so, what i was getting to... real and fake ones are different. in what way do you think they are different? or did they cover this in EC 205? I don't think they did.

1/27/2006 12:05:33 AM

In EC205 they told us "Okay, this is roughly what these graphs look like" then they rolled with it.

Mr. Hyman was all like "These graphs will have more of a curve" and whatnot. They never showed us real charts in that class, just rough approximations so we got the idea that wants are limited by economics (and so our heads wouldn't explode when we thought about why the slope of the guns vs butter curve changed).

Guns vs butter wasn't the main thing we talked about in the class. Usually we talked about the teenage guy with the truck with the big wheels who also wanted to buy CDs (instead of gas).

1/27/2006 12:09:20 AM

we talked about that too. and had pics of trucks. and sound clips.

1/27/2006 12:11:02 AM

holy pedantic mother fucker

1/27/2006 12:34:29 AM

it doesn't have to have a curve-shape in reality in order to verify that the curved shape of the theoretical model is in fact correct.

the theoretical model assumes efficient use of all available resources and production capability - if one is tracing the edge of the production possibility frontier (which is the whole point).

reality has waste. thus it will never trace the edge of the frontier, as the curve of the model has it.

In reality, all countries will be at least slightly inside the curved line of their production possibilities frontier - and the graph of actual economic tradeoffs made by nations between guns/butter can have any shape it wants.

The point of the PPF is conceptual and logical as a starting point, not necessarily entailing that even 'good' economies will be on their edge and show this exact curvature.

[Edited on January 27, 2006 at 3:26 AM. Reason : s]

1/27/2006 3:24:12 AM

congratulations on taking your first step on the road to hating macro like everyone else

1/27/2006 8:26:24 AM

Quote :

"but i have a problem with that. That is to say that the first gun you buy in a fully agricultural economy is free by the first order taylor series expansion. a gun is never free. "

I think it's saying cheap, but definitely not free...

The law of diminishing returns is pretty obvious. Do you disagree with this basic theory?

1/27/2006 8:26:27 AM

to say that a countries actual production curve will have a negative curvature because of diminshing marginal returns seem to have some backing to it, i don't disagree with that... in some cases. But in industrial production, making more of something can make it cheaper. When the U.S. converted automible factories to making tanks, was the 10,000th tank more expensive in terms of opportunity cost than the 500th tank? Perhaps the gained national security was greater with the 500th thank than the 10,000th tank, but that's not what the graph is graphing. And then the japanese example does not seem to reflect the downward curvature.

1/27/2006 8:51:11 AM

Quote :

"When the U.S. converted automible factories to making tanks, was the 10,000th tank more expensive in terms of opportunity cost than the 500th tank?"

Probably not, but after awhile you have exhausted your factory floor space. For example, utilizing all the available automobile factories, automotive workers, and machine tools available, we can build 10,000 tanks. However, to build the 10,001th tank, we need to start production in a neighboring butter-mill, manned by butter-laborers, working with machine tools hammered out of butter-churners. Did I mention the 10,001th tank would be made out of butter?

1/27/2006 11:17:19 AM

why does the title say bread and the graphs say butter?

1/27/2006 11:25:46 AM

1/27/2006 2:44:08 PM

weird

my microecon class did a similar chart with two randomly selected products from the class

we also used guns and butter

1/27/2006 4:18:39 PM

speaking of guns (i didn't want to start a new thread), check this out -
http://www.roanoke.com/politics/wb/wb/xp-50113

Quote :

"RICHMOND -- A state legislator accidently discharged a small handgun in his Capitol Square office Thursday morning, hitting a bulletproof vest that happened to be hanging on his door. Del. Jack Reid, R-Henrico County, publicly apologized on the floor of the House of Delegates and in private meetings with the chamber's Republican and Democratic caucuses. Reid suffered a cut on his hand in the accident, but there were no other injuries. Reid, 63, said the accident happened about 8:50 a.m, after he arrived at his seventh-floor legislative office in the General Assembly Building. The building was teeming with activity at the time, with legislators, staffers, lobbyists and citizens visiting offices and attending committee meetings. The veteran legislator said he was attempting to eject the ammunition magazine from his .380 semiautomatic pistol when the weapon discharged, sending a bullet toward the door. The bulletproof vest -- a gag gift from the Henrico County sheriff -- absorbed the bullet before it could cause any damage, Reid said. The delegate immediately reported the incident to the Capitol police. Reid, visibly upset, apologized for the incident on the floor of the House of Delegates and in private meetings with the House's Republican and Democratic caucuses. "I want to apologize to the members of this body, and to the greater body, for that incident that occurred," Reid said. "Everyone has a right to feel safe here. Again, I want to apologize and I'm just thankful that nobody's hurt." House members applauded when Reid finished his remarks. "I'm certainly sorry that the accident occurred, but sometimes accidents happen," said House Majority Leader Morgan Griffith, R-Salem, who sits next to Reid on the House floor. Del. Onzlee Ware, D-Roanoke, said he considered Reid's apology "appropriate and genuine." "In the three years I've been down here, it's the first time I've seen Jack visibly shaken," Ware said. Reid said he has had a concealed weapons permit for about two years. But he said that he typically removes the ammunition magazine from his weapon and locks the gun in his office when he is on Capitol Square. He was in the process of doing that Thursday when the gun discharged. "The interesting thing was I had come into the office, shut the door, and the vest was hanging on the door on a coat hanger," Reid told reporters after the House session. "That absorbed the entire thing." Reid, who can be both acerbic and comedic, once wore the bulletproof vest on the House floor as a joke. He said he was glad he had kept it in his office. Gun-holders with concealed weapons permits can carry weapons around government buildings on Capitol Square. Lawmakers have defeated efforts to curtail the practice, but Reid's accident might reopen the debate. "I understand that Jack's been a real trouper about apologizing to folks for it and he's a stand-up person," Gov. Tim Kaine told reporters Thursday afternoon. "But it does raise a safety question. You've got Boy Scout groups and pages and all kinds of folks walking around in the halls. So I think it's something the legislature needs to look at." Griffith said the incident could revive a debate about banning guns on Capitol Square, but he remains opposed to the idea. He guessed that several other House members have concealed weapons permits. "We've got six elevators" in the General Assembly Building, Griffith said. "If one of them crashes, that's a problem. It doesn't mean we ban elevators." Reid said he will reconsider his own gun-carrying habits. He may carry a different weapon, or none at all, he said. "I have a revolver and I think the strap across the hammer on a revolver probably makes it a little safer," Reid said. "I've got to think. I've got some soul-searching to do about that.""

1/27/2006 4:29:19 PM