Sep 02 2010

“Guns vs. Butter” – The PPC and tradeoffs in the real world

School kids feel the bite of high food prices – May. 5, 2008

A classic method of teaching the basic economic concept of the production possibilities curve is to illustrate the relationship between a nation’s decision to invest in military goods versus civilian goods. The model typically includes two “products” that a nation can choose to invest in: guns and butter. The specific goods themselves are not so important, rather what they are meant to represent: the tradeoff any nation faces between allocating more of its scarce resources towards national defense versus goods and services that benefit the nation’s consumers.


Today the United States faces a very real version of the old “guns vs. butter” model. Rising global food prices have put public school districts in a bind: how to feed kids nutritious meals as the prices ingredients has risen at unprecedented rates:

Rising food prices are making it harder for schools to cook up ways to give kids the nutrition they need.

Right now, they’re taking shortcuts and shuffling ingredients to make up the difference, but that’s only a short-term solution with long-term consequences on the horizon.

“I’ve been in school service for 27 years and this is the worst it’s ever been,” said Sara Gasiorowski, food service director for Wayne Township Schools in Indianapolis. “I have never seen food prices jump up so far…”

Food prices nationwide have risen 4.5% between March 2007 and March 2008, according to the Bureau of Labor Statistics’ Consumer Price Index, with flour and eggs rising even more dramatically than milk. Grumbles said milk prices in her district are up 22% from last year, which means an increase of 3.5 cents for each of the federally required 16,000 half-pints she provides every day.

“For every penny on a carton of milk, it costs me $30,000 a year,” she said. “That’s $105,000 extra on my food bill.”

Flour prices have roughly doubled over the last year, according to Grumbles, to $19 per 50-pound bag. To make up for the difference, she substitutes canned peaches for fresh apples “to save a couple pennies” per meal, or she uses ground beef in place of chicken.

Unfortunately, federal funding for school lunches has increased at a much slower rate than cost to districts of providing those meals:

Federal reimbursement programs cover all or part of school districts’ lunch tabs. Congress lifts reimbursement rates every year, but Gasiorowski said it hasn’t been enough: “We need to be looking at an increase of 12% to 15%, instead of our usual annual increase of 2 or 3%.”

The current federal reimbursement program is based on household incomes; the poorest American students receive $2.47 of federal funding towards their “free lunches”, while students from the highest income bracket only receive $0.23 per meal. The problem is, the average school lunch now costs $3.10, so these days no one is actually receiving a “free lunch”, not even the poorest American students.

This article struck me in that is truly does illustrate the concept of tradeoffs as illustrated in the production possibilities curve. Society must allocate its scarce resources towards the goods and services it deems most desirable based on the needs of its citizens. Complications arise in this basic model, however, when government is involved.

The commitment to subsidizing school lunches is based on the idea that if the responsibility of feeding American school children were left to the free market, resources would surely be underallocated towards nutritious meals, representing a market failure. School lunches are a merit good, meaning they would be underprovided by the free market, since without public provision and support, millions of American children would come to school every day without nutritious meals to get them through the day.

National defense is another service that governments find it necessary to provide.  If it were left completely up to the free market, national defense would probably not be provided at all. Instead, only individuals who could afford it would hire private security forces to protect their property. To protect a whole nation, however, government provision of defense is a necessity.

Clearly, both “guns” and “butter” create benefits for society. Among the countless other goods and services the government provides or supports the provision of, the United States faces a tradeoff arising from the scarce resources at the government’s disposal. Currently, the US government spends far more on  its military ($660 billion in 2010!) than it does on lunches for American school children. Clearly, military spending is necessary, but it may be that in the tradeoff between these two important services more resources should be allocated towards “butter” at a period in the US economy when low income households are finding it harder than ever to provide their children with one of life’s most basic necessities, nutritious food.

Discussion Questions:

  1. What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?
  2. Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.
  3. Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?
  4. Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

Update: I received an email message from a reader about the above blog post:

I have to say that your “guns and butter” diagram is “interesting.” I am not clear on why the United States should spend vastly more on school lunches than on defending the free world While government provided school lunches may have a place, most Americans feed their own children and do not depend on Federal financing.

Where did you get the notion that feeding our children would be “under-provided by the free market”

Here was my reply to this reader. I’m posting it here because I want to make it clear the the diagram above is not meant to make any political statement about US military spending:

Hello,

Actually, the PPC was included simply to illustrate the basic tradeoff that society faces when it chooses how to allocate its scarce resources.

Having taught at least for a short while in public schools, I can say that nutritious lunches are definitely “underprovided” by the free market, that is, many students in poor communities in America depend on the “free and reduced” lunches that are provided through federal and state funding programs… I once volunteer taught in a poor Elementary School in Spokane, Washington where 40% of the students ate only two meals a day, both provided free by the school district: one at 8 in the morning, one at noon. Many of these children had parents who were poor, unemployed, often addicted to drugs, who failed to put any food on the table whatsoever.

In other words, I do think that nutritious meals are a “merit good” which by definition is one that is underprovided by the free market, therefore requires subsidies from the government. Otherwise, why would the government offer such subsidies at all, if these meals were something the free market could adequately provide on its own?

Again, I was not making any political statement with the graph, only pointing out the basic economic concept of tradeoffs and the idea that society must allocate its scarce resources towards an “optimal” combination of goods and services. The article indicates that in this time of rising food prices, not enough of America’s resources are going towards providing nutritious meals for school children, indicating that a movement along the PPC might be in order. The degree of such a move is irrelevant, only the fact that a movement must occur if nutritious meals are to continue to be provided. In fact, the x-axis could have represented any other public good the government provides for society, I chose “military spending” so that the current example was consistent with the classic example of “guns vs. butter”.

Hope that clears things up… Best regards,

Jason


About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

45 responses so far

45 Responses to ““Guns vs. Butter” – The PPC and tradeoffs in the real world”

  1. John Phillipson 19 May 2008 at 5:38 am

    Here's a post on current legislative activity to make it more difficult for employers to keep guns out of the workplace.

    http://hrheroblogs.com/theword/2008/05/15/guns-la

  2. Theresa Mehlon 10 Sep 2008 at 3:03 am

    The posted article on the blog is a very good example of tradeoffs that every society has to face. 'Do we want to produce more of the consumer good butter? Or do we want to produce more of the capital investments of weapons?' As the society started producing more weapons the opportunity cost of producing butter rised. Less butter was therefor produced which lead the price of butter rise.

    Since all resources (capital, natural and human resources) are scarce we have to face these desisions every day. A government like the one in the article often decides to produce more capital goods, since capital goods are investments that will hopefully bring more productivity in the future.

  3. STUDENTon 16 Jan 2009 at 1:23 am

    Hello sir welker,

    I want to ask a question about the demand curve of guns and butter.Please explain that Why a demand curve is always downward in most of its levels .Can u also draw a simple demand curve for a society producing guns and butter.

    please reply.

    THANKS

  4. STUDENTon 16 Jan 2009 at 1:30 am

    Question 1: Lets suppose ,solar energy becomes a dominent form of energy in 21st century,

    then what will be its effect on growth n development on asia, north Europe and affrica??

    And

    Question2: where solar energy is very rare(Comaring asia, north Europe and affrica )??

    Please reply …

    THANKS

  5. bishalon 29 Oct 2009 at 9:45 pm

    hi

    bishal

    i just want to ask that iz law of diminishing utility and equi-marignal return avaiable in real world.if yes than can you show me and also with the help of a specific diagram..send it as fast as possible.

    thank you

    bishal

    nepal

  6. bishalon 29 Oct 2009 at 9:49 pm

    hello sir,

    its me again I have question can you help me to solve it

    1)use the principle of equi-marginal returns and the law of diminishing marginal utility to analysis the consumer behaviour in real world.

    the answer must be more than 5 pages.

  7. Maphrida Forichion 04 Sep 2010 at 6:08 am

    For some reason, I am unable to view the diagram at the top o this page. But since I have an idea of what it would look like, i am able to answer the discussion questions:

    1. Guns and butter represent, Capital Goods and Consumer Goods. Economists have found it useful to use these good because they are the opposite of each other so they can be contrasted and compared. They both benefit the economy in different ways. Another reason why economists use these two wypes of goods is becuase they both help the nation gain income but with different inputs and resources needed.

    2. The United States cannot just make the lunches free because as economists say, "There is no such thing as a free lunch". There are resources required to prepare the lunch. Natural Capital (kitchen in which the food is prepared), Human Capital (the cooks and chefs) and Physical Capital (the equipment used to prepare the lunches) all come with a monetary cost. The school children and their parents have to contribute money towards paying for the lunches because the production of the lunch is not free.

    3. As Mr Welkers email says, some parents are unable to provide food for their children. The government in partnership with the school, feel it is necessary to make lunch available for school children because it is convenient and efficient.

    4. The government would have to invest in more physical capital and employ more people, or merely by increasing Productivity. They wouldn't do this though because they would spend too much money. Instead they need to make sacrifices and marginal analysis decisions to make a trade off that would be best suitable in the situation.

  8. Tim B.on 04 Sep 2010 at 6:17 pm

    1) Guns and butter represent the capital and the consumer goods of a nation. Economist have found these two goods very useful, because they opposite each other but can also be compared. Both goods increase the income of a nation but they need different recourses in their production. They both benefit the economy but in different ways.

    2) It is not possible for the U.S. to provide free lunches to the school children, because the production of the food is not free. It uses different recourses like human capital and physical capital to provide the meal. Like economists say: "There is no such thing as a free lunch!"

    3) Many families don't have the money to buy or to provide a daily meal for their children. This means that they are unable to feed their child or children. School children have to get a meal once or twice a day. If the families can't provide their children with food it is necessary for the government to help out with a free lunch.

    4) The government would have to increase their productivity and they would have to employ more skilled people to increase both capital and consumer goods without reducing its provision of some other good or service. The government wouldn't do this, because the cost of increasing its productivity over weights the benefits by far. It would be too expensive.

  9. Simon B.on 04 Sep 2010 at 10:35 pm

    It is quite clear that America is more interested in winning their wars than feeding its children, the statistics that Mr. Welker posted prove it.

    The first thing that jumped to my mind when I read the statistics was, that perhaps that is the reason America has such a high obesity percentage, since the cheaper the food, the less healthy it probably is.

    Any country with high obesity rates will have to pay even more money for hospitals and clinics to take care of these people, which lowers the chance of getting enough food in schools even more.

    What I think might be a possible solution is for the U.S. of A. to stop being so involved in wars which don't involve their homeland. If they simply set up a stronger version of the Homeland Security Office, then they would save money which could not only be invested into school lunches, but the general education of American students.

    A better education would, in the long term, lead to a prosperous economy in the future due to a rise in skilled personnel in just about any industry.

  10. Thomas S.on 05 Sep 2010 at 6:59 am

    1) Guns and butter represent the capital and the consumer goods. These goods differ from each other, but can be compared as well. Therefore economists have founds these goods useful. Both of them increase a nation's income, but they need different capital (e.g. resources, entrepreneurship…)

    2) The US government can't make lunches free, because "there is no such thing as a free lunch". To provide schools with lunches natural, human and physical capital is needed. Therefore the US government can't prodcue a free lunch.

    3) As you can read in Mr. Welker's relpy to a reader's question, many American families cannot provide their kids a daily meal. But these children have to get a meal at least once a day. This is a reason for the government to help these families and support them with food.

    4) In order to achieve this rate of effiency, the government has to increase the productivity and invest in human capital to extend the limit of producing consumer and capital goods. Unfortunately the cost of investing into these things are higher than the benefits.

  11. Debbieon 05 Sep 2010 at 6:46 pm

    1. Guns represent capital goods, while butter represents consumer goods. Economists have found it useful to compare these two goods to each other as they are both goods which increase a nation’s income and are useful, but at the same time they need different capital to be produced. Additionally, the capital good can later be used by the nation to make another income (Winning a war); while a consumer good is simply consumed by the nation.

    2. Making all school lunches free for all American school children would not make sense, as “there is no such thing as a free lunch”. The process to produce a lunch requires physical, human and natural capital, which means that the lunch will never be free, and the government cannot afford to give all American children a free school lunch.

    3. Not every family is lucky enough to be able to provide a meal for their children. At this point the government feels responsible to allocate some resources towards school lunches, so that children who are less fortunate can also have a lunch.

    4. For the US government to be able to increase their production in both national defenses and school lunches without reducing their provision of some other good or service, they would have to invest in more human, physical and natural capital. They would have to use more advance technology, more skillful workers and they would need more natural resources. But the US government wouldn’t do this because it would cost them too much time and money.

  12. Christophon 05 Sep 2010 at 9:03 pm

    1. Guns and butter are just two examples, chosen by economists, representing Capital and Consumer goods. Both products require very different resources, and therefore shape the PPC curve the way it is. The example of guns and butter shows the concept of increasing opportunity cost. The more you produce of one item, the more you have to give up of another product.

    2. Cost isn't always monetary. If the U.S. government decided to make all school lunches free, they would have to lower their expenditures in other areas of government. Spending more money on school lunches would lead to a higher consumption of the three factors of production (Capital, Land, Labour). Therefore, the U.S. government would have to lower their investment in other resources intensive areas.

    3. Numerous families out there are not fortunate enough to enjoy three or more meals a day. Parents living in poverty, simply do not have the opportunity to provide their children with school meals. Thus, it is the government's obligation to take care of its nation's welfare and provide schools with 'free lunches'.

    4. Improving education, spending more money on advanced technologies, and investing in natural capital, would increase the provision of the nation's national defense and school lunches. That attempt however, would devour billions of U.S. dollars and would burn up a lot of the nation's savings.

  13. Alain Meyeron 05 Sep 2010 at 9:07 pm

    Simon's suggestions are nice in an ideal world, but they're pretty naive in practice. It's easy to say "no wars and better education", but people are always so quick to judge the government. They always provide fixes for the government that seem so simple, but in practice require a lot more. When a high school student starts suggesting ways for the government to "fix" themselves, we know that whatever they have to say is incredibly ill informed.

    Of course the US can't provide "free" lunches to students, because at the end of the day, it is them who will need to pay for the food. By moving the charge of $3 to families, they easily save millions per year.

    Synthetic food is obviously going to be cheaper because it requires less land for more yield. It bugs me when people like Simon make these comments that they think are so insightful, when really they're stating what's obvious. If we only provided natural, healthy food for everyone, there wouldn't be enough to go around. The whole reason we GM food and use chemicals is to sustain the population, which would otherwise be impossible to sustain.

  14. Jad Z.on 05 Sep 2010 at 11:10 pm

    1. Guns and Butter represents consumer goods and capital goods. Economists found these two examples good to represent the trade off of nations because both goods require very different resources, but both goods need to be produced in a successful nation.

    2. The US could make all lunches free but they would rather not because it would divert resources and spending away from military goods that they US takes great pride in.

    3. The government feels they have the obligation to allocate at least some resources towards school lunches because the government already makes it mandatory for all children to attend school when they could be working for at least some income (opportunity cost), it wouldn't be just if the children had to pay for all of the lunch in school as well.

    4. The US government could increase its provision of both national defense and school lunches, without reducing its provision of some other goods or services by investing in newer technologies and capital increasing it's efficiency of producing goods, allowing the US to produce more from less resources. On the long run this might be on the nations interest but the US might not choose to do this because in the short run it might take up too many resources such as time and money; in other words the opportunity cost might be too large.

  15. Beatrizon 06 Sep 2010 at 12:12 am

    1.Economist have found it useful to use Butter and Guns on their PPC graphs because, it helps us to choose between War fair and Food.

    To roughly define it, it just a choice for the government to choose whether to spend its money on “Butter” or food and services or “guns” which is money spent by the government for a Military defense. The truth is that every nation is faced with the decision to choose either guns or butter. Such decision falls under the category of opportunity Cost.

    2. Making all American School Lunches free wouldn’t make any sense because, as Mr. Welker always says:” there is no such thing as a Free Lunch” The certain steps to take to create a School lunch are : Human, Food (natural Capital)and Physical.

    There is an use in Food that the government has to pay. So this means that there isn’t any chance to get a Free School lunch because in general the government wouldn’t be able to afford it.

    3. As the Blog post says, some families aren’t able to provide a Lunch for their children. But those children need to get a proper meal at least once a day. This is when the Government is needed to help those families and support them with Food.

    4. In order for the government to achieve that rate of efficiency, they will have to increase the productivity and also invest in human capitals.

  16. Samantha Raineron 06 Sep 2010 at 1:23 am

    1. Guns represent Capital Goods and butter represents Consumer Goods. These goods have been found to be useful because they are opposites and they can be compared and contrasted. Each good benefits society in different ways; they both give society a source of income but to a different cost.

    2. The United States of America cannot make all school lunches free for all American school children because “There is no such thing as a free lunch”. There are many different resources required to prepare lunch for masses of students in public schools, all at different costs. Human, physical and natural capital is needed and these are not free.

    3. Not all families can provide their own children with lunch. The government has made it mandatory for all children to attend school; therefore it is their obligation to provide free lunches.

    4. In order to increase the provision of both national defense and school lunches the government would need to invest in natural and physical capital as well as put more money into new technology and a higher quality of education. The USA would not do this because it would cost too much money, money that they do not necessarily have.

  17. Francesca Perversion 06 Sep 2010 at 4:04 am

    1. Guns and butter represent respectively resources dedicated to defense and those allocated to food for social purposes (i.e. school lunches). Economists have found it useful because they represent two different kind of resources both useful for the country and for both the government is responsible.

    2. It wouldn’t make sense if the United States made all school lunches free for all American children for the following reasons:

    • resources aren’t free for free for the State so the State should allocate a big amount of resources to provide lunches for all.

    • Due to scarcity of resources the States wouldn’t have enough to provide the necessary defense to the country.

    • rich children do not need free lunches while poor children do, so the resources spent for lunches for rich children are in a way “wasted” by the States. On the opposite defense is needed by everyone (freedom and democracy more than property).

    3. The government has the duty to create equal basic conditions for citizens so if some part of the population (such as children coming from poor families) cannot afford to buy decent food, the government should give it to them.

    4. If the government decides to raise both national defense and school lunches expenses without reducing any other provision of goods and services, it should increase the taxes in order to get additional resources. The government wouldn’t do it easily because there is a limit in tax pressure (if you take away too much money from people they will not be able to survive in a good way) and because increasing taxation is very unpopular and politicians wants to be reelected.

  18. Matt Burnhamon 06 Sep 2010 at 5:07 am

    1. What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?

    The difference of investment in America towards military supplies and defending the country (Capital Goods) or civilian food sources (Consumer Goods). It's more commonly decided over the Cost vs. Benefit because in the long run spending more towards the capital goods will benefit the country more than the spending on lunches at schools which seems to be more of a less pressing matter than war making it less beneficial to be using more money on. Economists use it because of not only what it represents, but of what every nation faces in real life.

    2. Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.

    It wouldn't profit the government in anyway as there is no such thing as a free lunch. All the lunches require resources and human capital to make. They would be diverting and allocating scarce labour and other types of capital toward the lunches.

    3. Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?

    The poor families might not be able to afford proper nutritional for their children and rely on the federal spending to keep everyone fed. If they just cut all resources towards lunches the amount of starving people would dramatically rise causing more and more problems.

    4. Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

    To increase both national defenses and lunches would mean that the government would have to increase the human and land capital. Of course this wouldn't work because of the scarcity of both of these thing stops the US government from increasing the lunches and defenses. The cost outweighs the benefit as well in this situation.

  19. Pilar Mulleron 07 Sep 2010 at 12:45 am

    1. Guns and butter represent two totally different sectors of goods in the ecoonmy. Guns stand for national defense, military army, and weapons, in which the economy spends on and which are consumed in the short-term and in the long-term. Butter represents the sector of food and goods which are consumed more in the short-term.

    It is useful to illustrate those two goods on the PPC because those two goods represent things we need but which are also from two extremely different.

    2. Of course, it would be very admirable if the United States could just make all school lunches free for all student. However, this is not possible. Unfortunately, the government has not a infinite amount of money and therefore it will not be able to make all school lunches free. Another factor which contributes to this is that the government has to face trade-offs. It cannot invest and spend on everything it would like to. The government has to make choices in where to spend on. Because of that, sometimes (and very often) the "merit goods" are underprovided and the "demerit goods" are sometimes overprovided. This means that governements are more keen to invest in the army than in food products, because it thinks it can make a bigger profit by inversting in the army than in food.

    3. The government feels it is necessary to allocate some resources towards school lunches, because one goal of the government is to be fair and to spend on most of the necessary sectors. Since many families are not able to afford all they would need and want, the government takes this in account and tries to help them by paying a short amount of the school lunches. Nevertheless, as we in this article, it is not enough.

    4. In order for the US government to increase its provision of both goods without decreasing the provision of some other good, the government would have to get an increase in its government income. This means, if the government income should increase, the government would have to increase its taxes and thus the government income would increase. In this way, the government could increase its provision for both national defense and school lunches without decreasing its provision of some other good.

    Nevertheless, it is not always in the best interest of the nation's citizen to get an increase in taxes. People who have a low income already would get harmed by an increase in taxes.

    Therfore, this might not always be the best solution for everyone.

  20. Saugata Mittraon 07 Sep 2010 at 3:23 am

    1) What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?

    "Guns and butter" represent the tradeoffs between consumer goods and capital goods. Consumer goods represent goods that benefit people but are short-term goods, whereas capital goods can be reused as tools to create other things. However, guns only create jobs, since they're tools of destruction.

    2) Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.

    The United States would be using resources unnecessarily, even for rich school children, thus allocating resources inefficiently. It is much more efficient to allocate resources for school lunches for children that are needy, rather then children whose parents are more then able to provide them with nutritious food.

    3) Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?

    Families which are not able to provide their children with basic necessities such as food are in danger here: the government is providing mandatory education but won't provide food which is a vital necessity?

    4) Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

    The government would only be able to do this if the quality or quantity of resources increased. At this current moment in time, increasing its provision of both national defense and school lunches is outside its productions possibilities curve, thus being impossible.

  21. Matt Langfordon 08 Sep 2010 at 4:25 am

    1. What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the trade offs faced by nations?

    Guns and butter represent the Capital and consumer consumer goods and the trades off between the two that occur in a free market economy. These two in particular are used my economists in their analysis of trade offs as they are none interchangeable, yet both necessary to the well being of a nation.

    2. Why doesn't the United States just make all school lunches FREE for all American school children? Wouldn't that make sense? Give an economic argument against this suggestion.

    Although making all school lunches free would be desirable, it is not something that is obtainable, since to do this America would have to produce virtually no guns at all, and this is not something that Americans would feel safe about. They want peace of mind when it comes to national security, this is why they do not (why many of them do not) question why 660 billion on safety. Of course there are some ways to lower this cost as some of my classmates have already mentioned, yet there are not that satisfies both the physiological and physical needs of national security. So although free lunches are a good idea, no one can afford to pay for them, even if the food quality is next to nothing and the quantity therefore increased.

    3. Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn't the government just let American families provide their own children with lunch?

    Since the sheer cost of school lunches is above the amount that some families can pay it is necessary for the government to subsidize school lunches, and more so for poorer students. Without this there would be some students going the whole day hungry and therefore not producing work as efficiently as they could.

    4. Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn't the government do this?

    The government in the current economic climate could not do this as this possibility would be outside it's production possibility curve. The only way they could do this would be if they experienced economic growth through increasing the quantity or quality of their resources. Any government that wanted the best for it's people and could do this would, but it is currently impossible for the American government to provided free(r) school lunches and a strong national defense.

  22. Cedric Uribeon 08 Sep 2010 at 4:27 pm

    1. What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?

    “Guns and butter" represents the tradeoffs between consumer goods and capital goods. Butter represents the consumer goods because it is a short term good while guns are a capital as they can be used for other things. Economists have found it useful to use these two goods on their analysis of the tradeoffs because both goods generate income but they have different purposes. One is to feed the (American school children) while the other good is used for (national defense). However, both goods require different resources while they both benefit society.

    2. Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.

    The United States wouldn’t make all the school lunches FREE for all American school children because in economics, we know that there is no such thing as a “free lunch”. Therefore, it would not make sense giving out free lunches since you need physical, human and natural capital just to produce the lunches. It would be too costly for the United States to give away free lunches for each American school child. If the United States would give free lunch to each student, then they would have to lower their investment on homeland security which already costs the government 660 Billion dollars as of 2010.

    3. Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?

    The government feels that it’s necessary to allocate any resources towards school lunches because not every family can provide the basic necessities of food for their children. Therefore, the United States feels that it’s their obligation to take matter into their hands. Federal funding is used which allows school children to use the money for their lunches. Depending on your income bracket, you receive either more or less that is used to pay for their lunches. However, since the average price of lunch is now at $ 3.10 and a child from the highest income bracket gets $0.23 while a child from the lowest income bracket gets $2.47, the government is still not giving away free lunches because families have to pay the remaining of the cost of the lunch. The government also provides federal funding as they know that one day the American school children will be contributing to the American economy.

    4. Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

    If the US government decided to increase its provision of both national defense and school lunches without reducing its provision of some other goods or services, they would do this by increasing physical natural and human capital. The government wouldn’t do this because the cost of doing this would be too much especially at a time were the United States has a debt of over 13 trillion dollars. Not only would the cost be too great but when referring back to the basic economic concept, the scarcity of both national defense and school lunches it great. Another thing is that the cost of increasing both national defense and school lunches outweighs the benefit of increasing national defense and school lunches.

  23. Julius PvAon 09 Sep 2010 at 12:55 am

    1) What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?

    Guns and butter are a common used example for ppc's. This is because guns are capital goods and butter is a consumer goods. These are very different goods and therefore the trade offs are clear. Although both goods create income but have completely different purposes.

    2) Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.

    Their is no such thing as a free lunch. This lunch would have to be paid in a indirect way. Although you might no be paying this lunch at the counter you will be paying for it later or in another way. Taxes might increase so that the government can pay for these 'free' lunches.

    3) Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?

    Since the price of an average lunch is far above the government understand it is impossible for several families to afford school lunch. The government therefore helps and tries to pay a fraction of the lunch.

    4) Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

    When looking at a PPC we know that this would not be possible unless more resources are allocated. These resources might be imported from other nations but in some manner the government will need more resources. It would be very hard to obtain these necessary resources and the profit will not be very rewarding. Economics is run on the basics of 'supply and demand' if demand is high supply will be increased. Maybe the demand for lunches and national defense is not high.

  24. Emma Walwyn Brownon 09 Sep 2010 at 1:18 am

    1. What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?

    In the PPC, guns represent capitol goods whereas butter represents a commercial good. These two goods have been used by many economists in their analysis of tradeoffs because they are not interchangeable; the resources and skills required to produce butter are very different from those required to make guns.

    2. Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.

    Making school lunches free would have a huge opportunity cost. Putting government money into making lunches free takes away a lot of money from other areas. This money could come rom many areas in the government, but say it came from military and defense spending. By giving children free lunches the US government's military would end up being less equipped. Although many citizens would say they want a "free lunch" there is no such thing, because they are giving up some of the national defense by getting it.

    3. Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?

    The government allocates resources towards school lunches because it's not always easy for families to pay for the lunches themselves. The prices of school lunches are rising and a hungry child is not a happy child. By the government subsidizing the cost of the school lunches they are keeping children healthy in school and most likely more attentive. The government wants well educated children, not hungry ones.

    4. Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

    To do this the government would have go through economic growth and the way to do this is to increase land, labor, and capitol in both quality and quantity. This would stretch the PPC and the US government could produce on the further stretched line. The US government would not do this because it's a difficult and costly thing to do and in the current economic climate in the US it would probably backfire. Although it's desirable, the US can't just snap their fingers and say they want to expand their PPC, new land, labor and capitol doesn't come of out nowhere for free.

  25. Nathan Pon 09 Sep 2010 at 3:47 am

    1)In the PPC above, Guns represent Capital Goods, and in this case, also national defense, and Butter represents Consumer Goods. Economists have found that Butter and Guns represent two goods that will be commonly found in their respective areas.

    2) Making school lunches free doesn't allow for any economic growth. If there is no money going to the creators of the life, there will be no money flow.

    3) Allocating resources towards school lunches allows there to be growth in the consumer market, therefore helping the economy flow.

    4) The US government would have keep the economy growing in order to increase both national defense and school lunches. The government may not want to do this because increasing both Guns and Butter would not help the economy grow.

  26. Uday Srinivasanon 09 Sep 2010 at 5:08 am

    1. Guns represent natural defenses and butter represents goods that the general public consumes. These two goods are useful to use in economic analysis of tradeoff because they are need very different resources and adds a complexity to the simple straight-line ideology of a PPC.

    2. That would simply be too expensive. There shouldn't be "free lunches" because not only is this monetarily expensive, put also opportunity-wise. The government could fund more important areas other than school lunches instead.

    3. Since we are talking about public schools, the government is responsible for providing the students with a means to eat food. A key point of a public school is to allow poor families' children to also have an education. Families might not be rich (opportunity-wise) enough to prepare lunches for their children. Instead, they could be working for money while paying a nominal fee for the lunch. In addition, children are required by law to attend schools. It would be unfair to have a law that causes poor families to suffer.

    4. The only way to do this, assuming the economic growth is 0, is to raise taxes. This would however not appease the public, defeating the original purpose of mitigating the public's discomfort.

  27. Susanne Robertsonon 09 Sep 2010 at 5:30 am

    1. The guns and butter represent a tradeoff the American government faces. As guns and butter are scarce commodities, they are limited and the government must decide in which one to invest more. The PPC illustrates this tradeoff clearer and more visible. Guns and butter are respectively capital and consumer goods; they are both completely different goods. Capital goods, once produced, can most often be repeatedly used again, whereas consumer goods are simply “consumed” and cannot be reused. The PPC demonstrates the relationship between a nation's investment in defence and consumer goods. A nation has to choose between two such options when spending its scarce resources. It can buy either guns or butter, or a combination of both. Economists have found using guns and butter useful as an example, because they are both equally important in our society.

    2. Ideally, the idea of free school lunches for all American school children appears to be a good one. Economically speaking, it is not. Free lunches for all school children is just not an option when considering how much labour, capital and land must be invested to produce these lunches. In addition, the parents of many children can afford to pay for school lunches themselves. Due to the high demand for these scarce resources, the government has to provide and invest the nation’s finite resources in other goods such as roads or school books. The recurrent economic expression of “there is no such thing as a free lunch” which means it is impossible to get something for free can be applied to describe this situation.

    3. If the government expects every child, from the richest to the less fortunate, to attend school, clearly the less privileged can often struggle to make ends meet. It is the government’s duty to provide an education and minimum standard of welfare. Education and welfare is not only to be associated with academic subjects but also nutrition and health aspects. By providing school lunches to the less fortunate, the government is fulfilling such a commitment to provide a minimum level of education and welfare.

    4. In order to increase provisions of national defense and school lunches without reducing its provision of another good or service, the American government would have to increase the supply of resources used to produce national defense and school lunches. It could increase the supply by borrowing money in order to buy resources from other countries. If a government borrows money, it will run into problems if it cannot repay the money it borrows. If all of its resources are spent on school lunches and national defence it would have no money to repay such borrowings. Evidently, school lunches and national defense are not the US government’s main priority when it comes to allocating the nations scarce resources. Not only would it be a waste of finite resources but it would also eventually lead to the reduction of its provision of some other good or service as the scarce resources will be used for national defense and school lunches.

  28. Philippaon 09 Sep 2010 at 9:52 am

    1. “Guns and butter” on the PPC shows the trade offs between two different types of goods: consumer goods (butter) and capital goods (guns). In this article, the butter represents the lunches for American children and the guns represent military equipment. Economists use this example frequently because the different industries are not interchangeable and the skills and resources from one cannot be directly used in the other. Nations face trade offs such as this all the time. They decide whether to produce consumer goods that will be consumable at that very point in time, but will increase the quality of life for the people, or produce more military weapons to keep the country safe. It can be difficult to chose between the two.

    2. Providing all American children with a free lunch would not be most beneficial to the nation. The American families who are able to afford lunch do not need to be provided with one. The money that would’ve paid for a lunch can be used in other areas of development. The lunches would therefore not be free children because the opportunity cost is what could have otherwise been done with that money which would have been of a greater benefit to themselves.

    3. Besides from the fact that it is morally correct and only fair if the government provides lunch for the children after making it compulsory to attend the school in the first place, the goal of a nation is to ultimately create the best, most skilled and educated population possible to receive better quality labour in a higher quantity which will help towards economic growth. Basic human needs such as food is needed for children to be able to concentrate and work the hardest and retain the most information. The government needs to give a little in order for the nation to gain a lot.

    4. To increase both national defense and school lunches without reducing the provision of some other goods is impossible in the current situation in the US. This would mean producing at a point past their PPC which would require economic growth. To attain economic growth, the quantity and/or quality of the four factors of production, land, labour, capital and entrepreneurship would have to rise. This is an expensive and time-consuming process. Due to the fact that the US has already accumulated a large debt, and the world is recovering from a recession, this would not be ideal.

  29. Geoffroy the Frenchion 09 Sep 2010 at 3:40 pm

    1. Guns represent capital goods and butter represent consumer goods. Economists found it useful because they help the economy in different aspects, and the 2 goods require different resources therefore even if a lot of butter is produced the nation can still makes as many guns. We can compare and contrast the two.

    2. Because the lunch isn't free for the school/government to make so neither should it be free for all American school children. There is no such thing as "free lunch", government has to pay for capital goods (ingredients), labor (cooks), and land (the kitchen). Anyways not all American children are poor a lot can afford to pay a small price for a lunch or bring in their own.

    3. Not all families can provide for their own children, and neither can most orphanages so the government feels the need to step in and provide a minimum to feed these children in need.

    4. The government could do this by employing more people or barrowing from more banks/investors, by buying capital goods from specialized economies for a cheaper price, or anything else that improves productivity. But the country can't just do this because it would have to increase the wages to get higher employment rate, and they don't want to barrow money to later have to pay back with interest because free lunches and war don't profit the government enabling it to pay back.

  30. Nathan R.on 09 Sep 2010 at 4:09 pm

    Guns and butter are just a basic economic simile to differentiate between consumer and capital goods. The butter is the consumer good, one that people go off to the market and buy, and guns are the capital good, the one the government feels is necessary but will have no direct consumption. What makes these two goods suitable for analysis is that they have resources that are used by both goods, but other resources that are good specific, this makes for an outward sloping PPC, which as well as showing tradeoffs, also illustrates the law of increasing opportunity cost.

    The United States doesn't make free lunches for all school children specifically because there is no such thing as a free lunch. All the lunches that have to be provided FREE to school children are in fact payed for by the American Government, so there is still a cost involved. Increasing the number of free lunches would increase the amount of capital (money in this case) that the U.S. government has to put into said lunches, and in economics this means less capital available for other goods which are government subsidized (eg: Peanuts). This would make no sense, there is not enough demand for the free lunches, seeing as a majority of school children can still afford their own, for it to be beneficial of the U.S. to provide more free lunches; demand for the product is to low for it to be reasonable to increase the supply without causing a glut.

    The government deems it necessary to allocate some resources towards school lunches because there is a moderate demand, if people did not demand for nutritious school lunches them it would make no sense for the government to allocate resources to their production, but, even though many children may have their families provide their food, thousands more still eat in school cafeterias.

  31. Orpa Alamon 10 Sep 2010 at 1:36 am

    1. Guns represents capital goods, where as butter represents consumer goods. And this example is very useful to show tradeoffs because both are essential to the economy. Butter, representing the consumer goods, is necessary to keep the consuming/buying part of the economy running, where as guns, representing capital goods, are needed to keep the production side of the economy running. Hence one needs to decide which one is more necessary to make the most output, not only for short term results but also for long term results. And this is why economists have found it useful to use these to products in their analysis.

    2. The Unites states can not do this because that would mean they are allocating all their resources into consumer goods and that would mean there would be less capital goods to make the consumer goods. Hence in the long term there would be certain undesirable outcomes. And as the economists say "there is no such thing as a free lunch".

    3. The government can not do this because if they allocate all their resources towards capital goods then there would not be as much consumer goods hence the profits would be less, as well as the outputs. Also the GDP would sink due to the fact that the living standard not being as good as it could be. Though they would have more consumer goods later, one has to think about short term results as well as long term results. Also it is known that some parents can not afford the lunches for their children and if the children don’t have enough food they wont have the energy to get through school and this will lead to a lot of them not attending school and the number of educated people would drop, which in turn would negatively affect the economy.

    4. For one it isn't possible to do this without going into massive depts. there is ALLWAS an opportunity cost of some sort. And though it may sound wonderful to be able to increase both it is not possible without major economical growth. And because it is impossible to create a fast economical growth without having an equally major opportunity cost the government would never risk their entire economy to simply raise the provision of consumer and capital goods. Especially since both goods are very scarce and therefore the costs would not help their already indebted economy.

  32. Carl S.on 10 Sep 2010 at 1:41 am

    1. What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?

    The guns and butter PPC or PPF curve represents the tradeoff between the production of consumer goods and capital goods. The butter represents the consumer good because it is something that households demand as they are the consumers. Guns are what is classified as being capital goods because they represent what is being used and not necessarily being consumed. These two goods could easily be replaced by scarfs and office buildings but the butter and guns are being used in this example. Economists have found it useful to use these two goods in their analysis because they represent what nations or governments have the possibility of producing, either consumer goods (butter/scarfs) or capital goods (guns/offices). The PPC illustrates that guns and butter take different qualifications of labour, different land resources and different technologies to make each and when moving from one point to another there has to be some consideration to the fact that the allocation of resources has to be so that the nation is at the best efficiency production, meaning that the best combination of guns and butter is being produced. The reason that the PPC is 'bowed' outwards is because of the law of increasing opportunity cost, meaning that the tradeoff between the factors of production is increasing when moving towards the extremities of either side of the PPC (considering that the movement is along the PPC curve).

    2.Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.

    The economic saying that there is no such thing as a free lunch can apply because the American government is paying for the lunch and so it wouldn't be free, would it?

    The other possibility that the American government could consider is that the children who's parents earn below $27,000 per year (to support a family of four) could have the lunch supplied to them by the American government with no extra cost as done now. Then have the children who's parents earn a certain amount or above (that could be decided by the American government) pay slightly more as to make the difference and more as to afford to pay for even more children than before. So with this new system in place the American government could pay for every child who's parents earn $30,000 per year. This would help people in this range save money as well as the American government. The only problem would be that the 'richer' families would have to pay more and these particular people will not be too happy.

    3. Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?

    The problem with this idea is that the children who have parents that do not properly support them will suffer. This would make for a terrible situation, however some would argue that you work to where you are and a more laissez faire approach but the argument against this sort of proposition and this laissez faire attitude is that children do NOT earn and income and CANNOT support themselves. Children cannot help that they are born into an unfortunate situation and so this would be an unfair and a damaging solution. These children that do not have a good domestic situation might end up damaging the economy and the economic development of a country because they will become involve in stealing, drug trade, ect. and the problem with this is that they might also go on to kill because they need to survive and they will do so by any means possible. THis is a bad idea.

    4. Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

    The government will do this by increasing or bettering the factors of production, namely land, labour and capital. The US cannot increase its land resources unless they invade and conquer another country. They can increase the immigration by opening its borders but the problem will be that the immigrants might be uneducated and harm society as well as the economy. The government could take loans from banks as to help increase capital goods, and this would lead to a positive increase in the production in other goods and services or it would lead to an growth in the economy.

  33. Larissa Wezenbergon 10 Sep 2010 at 2:58 am

    1. The PPC above shows us the tradeoff between two different types of goods: guns represent Capital goods, and butter represents Consumer Goods. Economics have found it useful to use these two goods on their analysis of the tradeoffs faced by nations because different industries are not interchangeable and the skills and resources for these two products are very different from each other. Nations face these kinds of tradeoffs a lot, on which they then have to decide if they want to produce more consumer goods, which will improve the standard of living of nation's people over time, or capital goods, which will only benefit part of the nation.

    2. Making all school lunches free, is not the most efficient decision. The United States will only lose money because there is no such thing as a "free lunch". The United States will still have to pay for the food. Having a free lunch won't benefit them because how will they make a benefit if no one pays them back? It might benefit the American school children since they will not have to pay anymore, but it doesn't benefit the United States.

    3. Of course it would be a lot easier for the government to just let the families pay for everything, but not producing any consumer goods gives no economic development. Children have to go to school to learn and gain as much information as possible, but it becomes very hard to do so with an empty stomach. If the government wants the best and most skilled educated population, they will have to give a little to the population. Giving everything is inefficient, and not giving anything stops the economic development.

    4. To increase both national defense and school lunches without reducing its provision of some other goods or service is not possible at the moment for the US. To be able to get to that point, they need economic growth. Economic growth occurs when the quantity or quality of a country’s production of land, labor, capital and entrepreneurship increase. This does take a lot of time though, as it is a long process. As we all know, the economy of the US already collapsed once before and the world is still recovering from this. Therefore, achieving economic growth is not the best thing to do right now.

  34. Beatrice Benderon 10 Sep 2010 at 3:10 am

    1. What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?

    Guns and butter are illustrated as the tradeoffs that the nation faces and the decision how to allocate their resources. Guns are represented as the capital goods(defense spending) and butter is represented as the consumer good. It is useful to illustrate consumer goods vs. capital goods, because this is what most nations tend to face. Since both goods need different resource mix (land, labor, capital), the nation will always face the decision to produce more of one good then another, which is called opportunity cost. These two good are found to be useful, since they can be compared as well. Both goods help increase the nations income.

    2. Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.

    The United States cannot make all school lunches free, since it will decrease their funding for defense (guns). Behind each lunch there is a certain input of human capital and physical capital in order to produce the meal and serve it to the schools. Since the production of each meal is not free, it is required to pay for the meal. Plus the imbalance between the poor and the rich would increase. After all we know that : "There is no such thing as a free lunch."

    3. Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?

    The government should feel it to be necessary to provide free lunches(merit goods) to those families who cannot afford to provide lunches for their children. After all the unfortunate children without any lunches, will eventually have long term affects such as health issues, which the government then would have to pay. It's in the governments own interest to provide their future workers efficiently.

    4. Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

    The increase of both the national defense and school lunches the US will have to increase their number of skilled workers as well as increasing all of its other resources that are needed: land, labor and capital. To increase these resources in order to increase the national defense and school lunches the government will not go through with this, because it will take up too much time and the cost will be too high. To pay for both the US would have to raise their taxes and use loans, which in the end will plunge them into large debts.

  35. Stephanon 10 Sep 2010 at 4:10 am

    Well since there are tons of posts on this blog and most of the posts are more or less the same i guess i can just write that i read the source and that i agree with the earlierst posts which i read, especially Simon B.'s post made me think about the momentary situation of the States.

  36. Philip B.on 10 Sep 2010 at 5:50 am

    Discussion Questions:

    What do “guns and butter” represent on the PPC above? Why have economists found it useful to use these two goods on their analysis of the tradeoffs faced by nations?

    Guns and butter on the PPC above represent capital and consumer goods and clearly show the trade off between these two. These two can be seen as metaphors for many other possible PPC's and goods to be used in these. Guns therefore dont only stand for a nations defense, but any good which does not directly benefit or influence consumers. Butter on the other hand, stands for a goods which are directly beneficial for consumers and will help profit them directly.

    Why doesn’t the United States just make all school lunches FREE for all American school children? Wouldn’t that make sense? Give an economic argument against this suggestion.

    It is naive to think that the American government should make all school lunches FREE. The poor may benefit greatly from this, but it would obviously mean a decrease in government spending on another good, for example a country's defense and military. Since making all school lunches 100% free would cost a great lot and may even be impossible to achieve with the economy at the moment, it would mean a loss of most or even all military spending

    Why does the government feel it necessary to allocate any resources towards school lunches? Shouldn’t the government just let American families provide their own children with lunch?

    Some people, of course, are not fortunate enough to be able to support their children with several meals a day, meaning a heavy dependence on these very school lunches. In a purely market economy, there would simply not be enough spending on school lunches and children would rarely receive their necessary meals.

    Say the US government decided to increase its provision of both national defense and school lunches, without reducing its provision of some other good or service. How would it do this? Why wouldn’t the government do this?

    To achieve this, first of all, the government would have to increase it's economy. It would need more labor, land and capital in order to achieve this goal, which may lead to higher taxes, lower wages and in general a worse quality of life for the people of the country.

  37. Kristyon 10 Sep 2010 at 2:42 pm

    1. Guns represent a capital good whereas butter represents a consumer good. Economists find it useful to analyse the tradeoffs face by a nation because these two products serve different purposes. Capital goods are generally something that will affect the market in the long run as opposed to consumer goods which are things that benefit us right now. Both are necessary which makes the decision of where to allocate a nations scare resources an important one.

    2. As the saying goes “there’s no such thing as a free lunch”, if the government were to make all school lunches free it would cost them a decrease in the quality of the US defence as they would have to allocate a lot more of their resources towards “butter” rather than “guns”. It would make more sense only to provide free lunches to children whose families cannot afford it rather than to everyone who could easily pay for a nutritious meal with their own money.

    3.The government must allocate some money towards school lunches as some families cannot afford to feed their children of their own accord and rely on the government to provide support. If these underprivileged children went without lunch their concentration would decrease meaning they would get worse marks leaving America with a mass of under qualified workers.

    4.To increase both the national defence and school lunches without reducing provision from some other good or service there would have to be an increase in the quality or quantity of resources. They could do this by raising taxes. But they would not do this because people with an already insufficient income would be pushed even further into poverty, as they can’t provide their children’s lunches in the first place being taxed for it is out of the question.

  38. Alisha MacIsaacon 10 Sep 2010 at 9:19 pm

    1. Guns and butter represent capital and consumer goods in America. It's usefull to use these two goods as symbols for other goods because they are essential to every country, but are a very basic representation that everyone can relate to and understand.

    2. The government cannot simple provide free lunches for American school children. besides the obvious "there's no such thing as a free lunch" argument, which in this case is taken quite literally, we have to pay the wages of the people who prepared the meal, people involved in transportation and other costs of the lunch, that the government cannot take on as an additional cost. We can see that the figures for only additional increases in lunches are high, so imagine how expensive the lunches of each school are anually. If the government was to provide all of that money, they would lose funds for other goods, in this case specifically "guns" or capital.

    3. Because this situation is tailored to children it is a simple answer. Some families are not financially able to pay for their childrens lunches, and because they are not young enough to make money or provide themselves, the children will suffer. Therefore it is the responsibility of the government to step in and provide funds for something that plays a role in the daily lives of nearly every student across the country.

    4. In order for the government to become more efficient in the production of both butter and guns they would have to increase their resources, particularly labour and capital, but this would be a difficult task to increase these resources so largely in two different industries. It would be a very large task for the government to take on when instead they could make the decision to choose one good over the other.

  39. matt beattieon 16 Sep 2010 at 3:40 am

    Guns and butter represent capital and consumer goods. Economists have found it useful to use these two goods on their analysis of the tradeoffs faced by a nations because a nation needs to chose between butter, consumer goods symbolizing food, and guns, capital goods such as robots. If a nation was to invest all of their resources to capital goods the country would grown economically but the quality of life would be very low and the same the other way around, if the country was to invest all of their resources into consumer goods the country wouldn't grow economically but the quality of life would be higher.

    The United States can't just make all of the school lunches free for all American school children because the resources needed natural, human and physical capital all come at a certain price. As a result the United States can't simply make all school lunches free without there being a cost.

    Some family's can't provide their sons or daughters with a lunch due to reasons due to not enough money or various other reasons. School children need to eat at least once a day to focus in their classes. Therefore, if it is not possible for the parents to provide the government needs to step in to provide a school lunch.

    The government would have to increase their productivity by either getting more skilled workers or improving their capital goods such as robots or if the country isn't producing to maximum output and they need to increase efficiency so they can still make more capital and consumer goods.

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