Within this scenario, the United States can consume beyond its PPC by specializing in cheese and exchanging it for tomatoes from Italy.
<h3>Why is this possible?</h3>
- Italy's cheese production is lower than the US's production.
- Italy cannot consume cheese other than PPC unless some country supplies these products.
- The US can consume tomatoes in addition to PPC by making an exchange agreement with Italy.
As the production of cheese in the USA is much higher than the production in Italy, we can consider that the USA can supply this product to other countries without compromising its consumption. However, the production of tomatoes in the USA is the same as the production in Italy, but taking into account that the USA is a more populous country than Italy, tomato consumption can be compromised in the country.
For this reason, tomato consumption in the US may exceed the PPC of tomatoes if the country obtains this product from another country. This can be done through barter, where the US supplies cheese to Italy and Italy supplies tomatoes to the US.
Learn more about PPC:
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