Economists Do It With Models

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People Think Guns And Butter Are Funny…

September 11th, 2009 · 71 Comments
Econ 101 · Just For Fun

I feel like Indexed is paying homage to the start of fall semester:

(For the record, the title is “Resources were not allocated efficiently.”)

Get it? I am guessing a lot of Indexed readers don’t. From the comments:

“Heh, I just started an Economics course, so I get the reference. I wouldn’t have done two weeks ago, mind.”

See? Economics is totally useful. The “guns and butter” refers to the goods that are usually the axes of a production possibilities frontier, or PPF for short. The PPF shows the tradeoffs that an economy has to make in terms of how to allocate resources to production, and because paper, chalkboards, etc. are limited to two dimensions, it’s only reasonable to pretend in a simple model that the economy can only produce two goods. The two that are typically chosen are guns and butter because they represent food and defense, which are two main staples of any society. For a video on the production possibilites frontier, see here.

Now you get the “He’s Got Guns And Butter On One Of His Guns” line too… 🙂

Tags: Econ 101 · Just For Fun

71 responses so far ↓

  • 1 PeterM // Sep 11, 2009 at 4:05 pm

    What about golf courses for the military? Where don they fit in?

  • 2 PeterM // Sep 11, 2009 at 4:06 pm

    Do, not don.

  • 3 Kevin // Sep 11, 2009 at 4:27 pm

    Interesting, in my AP econ classes last year the examples on PPC curves were typically used to show the trade-off between capital and consumer goods. Pizza vs robots was the choice I remember showing up most often.

  • 4 Fred // Sep 11, 2009 at 5:03 pm

    Great job teaching. I finally got a chance to see you “live.” Now if I could understand the entire formula, I’d be doing okay. Thanks for using YouTube for teaching.

  • 5 econgirl // Sep 11, 2009 at 5:17 pm

    @ Kevin: The guns and butter also fit the capital versus consumer goods framework…

  • 6 Ethan Bergstrom // Sep 11, 2009 at 5:17 pm

    I didn’t get it at first because my econ teachers never used guns and butter as examples on the PPC. The two examples I tend to see the most in class is beer and pizza (fitting, I suppose, for teaching college econ classes lol…)

  • 7 Susan // Sep 11, 2009 at 5:22 pm

    Since starting graduate school this fall, I have now heard this in at least three separate classes at different points. But my favorite comment came when a classmate interjected: “Well the guy with guns is in real trouble because he will most likely starve to death before the guy with all the food.”

  • 8 John Harvey // Sep 11, 2009 at 11:54 pm

    I like to use food and clothing in my lectures. It becomes the Sumo Wrestler/Fashion Model economy. Students remember the imagery and there are all sorts of jokes and strange trivia that pop up in the discussion.

  • 9 Jon Odsather // Sep 14, 2009 at 7:52 pm

    I prefer the Milk and Missiles it puts a more Macro scope on the whole comparative advantage thing because there are many dairy farmers that dabble in gun production in the off season. However, there are NO milk Maids that dabble in Astro Physics.

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