Travistan budget activity

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Travistan budget activity

  1. 1. 1. Travistan is an enchanting and beautiful country of 10 million hard working people. In your groups decide how to allocate the country’s budget of $200 million New high schools: $2 million each New universities: $5 million each New high way system from capital city: $100 million New Soccer stadium: $50 million Update military hardware: $50 million Build new military head quarters: $10 million Recruit 1 million new soldiers: $2 million New sewer system for capital city: $10 million Build a wall around the country to keep out invaders: $25 million Design new flag for country: $0 design a cool new flag for the country Clean up capital city’s pollution problem: $2 per lb/sq. inch, there are 100 million lb/sq. inch in the sky 2. Create a PPF showing guns (defense) vs. butter (infrastructure), label your choice with an “A”, label possible area and inefficient areas. 3. What problem might cause you to be inside the PPF? (specific to government getting the money to the right places) 4. How could you combat the problem of #3? 5. How could you shift your PPF out? (What is it your budget based on?) 6. What would be opportunity cost of #5? 7. Why didn’t you clean up all the pollution? 8. What does your answer to #7 have to do with diminishing marginal returns? 1. Travistan is an enchanting and beautiful country of 10 million hard working people. In your groups decide how to allocate the country’s budget of $200 million New high schools: $2 million each New universities: $5 million each New high way system from capital city: $100 million New Soccer stadium: $50 million Update military hardware: $50 million Build new military head quarters: $10 million Recruit 1 million new soldiers: $2 million New sewer system for capital city: $10 million Build a wall around the country to keep out invaders: $25 million Design new flag for country: $0 design a cool new flag for the country Clean up capital city’s pollution problem: $2 per lb/sq. inch, there are 100 million lb/sq. inch in the sky 2. Create a PPF showing guns (defense) vs. butter (infrastructure), label your choice with an “A”, label possible area and inefficient areas. 3. What problem might cause you to be inside the PPF? (specific to government getting the money to the right places) 4. How could you combat the problem of #3? 5. How could you shift your PPF out? (What is it your budget based on?) 6. What would be opportunity cost of #5? 7. Why didn’t you clean up all the pollution? 8. What does your answer to #7 have to do with diminishing marginal returns?

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