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Consumer goods (millions per month 30 20 OC 10L 0 10 20 30 40 50 Capitol goods (millions per month) Refer to the production possibilities frontier in the figure

Economics Nov 21, 2020

Consumer goods (millions per month 30 20 OC 10L 0 10 20 30 40 50 Capitol goods (millions per month) Refer to the production possibilities frontier in the figure. There will be no opportunity costs when we move from? Lotfen birini seçin: Octob b to a a to b d to a
50 oo 40 Consumer goods (millions per month 20 o 10 0 10 20 30 40 50 Capitol goods million per month Refer to the production possibilities frontier in the figure. If the country moves from point a to point d, the opportunity cost of the move is Lotfen birini seçin © 20 million capital goods. 30 million capital goods. 10 million consumption goods, 10 million capital goods.
Capitol goods (millions per month) D PPF PPF Consumption goods (millions per month) In the figure, in order for this country to move from production possibilities frontier PPF1 to PPF2, it might Lütfen birini seçin: increase the average level of prices for all goods produced and consumed increase the skills and productivity of its work force. put all unemployed resources to work producing desired output engage in exchange with other nations.

Expert Solution

Q1 - c to b is the right answer. This will increase the production of capital goods without reducing the production of consumer goods, and hence no opportunity cost. This is possible in this case since the country is producing sub-optimally currently.

Q2 - movement from a to d, requires that production of capital goods be reduced from 30 million to 10 million. Hence opportunity cost is 20 million of capital goods

Q3 - second option is the right answer. What is desired here is an improvement in productivity of the economy since PPF2 is higher than PPF1, which is possible when skills and productivity of workforce increases.

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