1. Production Possibilities It has been determined that Germany and France can produce the following combinations of consumer and capital goods. Germany Option Consumer Goods Capital Goods A 0 BUDE 400,000 300,000 200,000 100,000 0 25,000 50,000 75,000 100,000 France Consumer Goods Capital Goods 0 1,200,000 900,000 600,000 300,000 0 150,000 300,000 450,000 600,000 Complete parts a, b, and c. a. Graph the production possibilities curve for both nations on separate graphs with capital goods on the x-axis each case. b. Does the Law of Increasing Opportunity Costs hold for France? Explain why or why not. c. If Germany wanted to experience higher levels of economic growth over the next few years, would they be better off choosing option B (a combination of 15000 capital goods and 90000 consumer goods) or option D (a combination of 45000 capital goods and 30000 consumer goods)? Explain.

1. Production Possibilities It has been determined that Germany and France can produce the following combinations of consumer and capital goods. Germany Option Consumer Goods Capital Goods A 0 BUDE 400,000 300,000 200,000 100,000 0 25,000 50,000 75,000 100,000 France Consumer Goods Capital Goods 0 1,200,000 900,000 600,000 300,000 0 150,000 300,000 450,000 600,000 Complete parts a, b, and c. a. Graph the production possibilities curve for both nations on separate graphs with capital goods on the x-axis each case. b. Does the Law of Increasing Opportunity Costs hold for France? Explain why or why not. c. If Germany wanted to experience higher levels of economic growth over the next few years, would they be better off choosing option B (a combination of 15000 capital goods and 90000 consumer goods) or option D (a combination of 45000 capital goods and 30000 consumer goods)? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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