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Gotham's economy produces only two goods, food and machinery

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Gotham's economy produces only two goods, food and machinery. In 2019 Gotham was able to produce 200 units of machines using all available resources. If all available resources are used for food production, in the same year the Gotham economy can produce 400 units. In 2019 the Gotham economy was able to operate efficiently.

a. Draw the production possibilities frontier (curve) of the Gotham economy in 2019, with increased opportunity costs per machine unit (the machine is represented on the X-axis). Explain the various economic concepts represented by the curve.

b. Using the graph on (a) determine 3 points (name them as A, B and C) that can describe the Gotham economy in 2019.

c. Five years ago Gotham’s economy was not able to use all available resources, what conditions happened in Gotham? Using the same graph as points (a) and (b), create a point (name it D) that shows the condition. Explain.

d. How do you explain the changes that have occurred in the Gotham economy during the five year period?