5. Capital investment in less-developed countries Aa Aa The following graph shows the production possibilities curves (PPCs) of two hypothetical countries, Anga and Panchal. Each economy produces only two sets of goods, consumer goods and capital goods. Although both countries had identical production capabilities in 2010, Panchal had a larger population and a greater need for consumer goods. In 2010, Panchal produced 60 million units of consumer goods and just enough capital to replace the existing capital that was worn out in that year. Anga produced only 50 million units of consumer goods and more than enough capital goods to replenish its depreciated capital. Assume that both countries produce efficient levels of output. On the following graph, use the black point (X symbol) to show the combination of goods that were produced in Panchal in 2010. Dashed drop lines will automatically extend to both axes. Then use the red point (cross symbol) to show the combination of goods that were produced in Anga in 2010. CAPITAL GOODS (Millions of units) 100 80 60 40 20 0 20 PPC of Both Countries 2010 Panchal Anga 40 60 100 CONSUMER GOODS (Millions of units) Help Clear All By producing capital goods over and above the amount necessary to replenish the stock of depreciated capital, an economy can increase its productivity. In this case, will experience greater economic growth in the future.
5. Capital investment in less-developed countries Aa Aa The following graph shows the production possibilities curves (PPCs) of two hypothetical countries, Anga and Panchal. Each economy produces only two sets of goods, consumer goods and capital goods. Although both countries had identical production capabilities in 2010, Panchal had a larger population and a greater need for consumer goods. In 2010, Panchal produced 60 million units of consumer goods and just enough capital to replace the existing capital that was worn out in that year. Anga produced only 50 million units of consumer goods and more than enough capital goods to replenish its depreciated capital. Assume that both countries produce efficient levels of output. On the following graph, use the black point (X symbol) to show the combination of goods that were produced in Panchal in 2010. Dashed drop lines will automatically extend to both axes. Then use the red point (cross symbol) to show the combination of goods that were produced in Anga in 2010. CAPITAL GOODS (Millions of units) 100 80 60 40 20 0 20 PPC of Both Countries 2010 Panchal Anga 40 60 100 CONSUMER GOODS (Millions of units) Help Clear All By producing capital goods over and above the amount necessary to replenish the stock of depreciated capital, an economy can increase its productivity. In this case, will experience greater economic growth in the future.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
PLEASE SHOW ME WHERE PANCHAL AND ANGA WOULD GO IN THE GRAPH, JUST LIKE THE QUESTIONS ASKS.THANK YOU VERY MUCH
Note:-
- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
- Answer completely.
- You will get up vote for sure.
Transcribed Image Text:5. Capital investment in less-developed countries
Aa Aa
The following graph shows the production possibilities curves (PPCS) of two hypothetical countries, Anga and Panchal.
Each economy produces only two sets of goods, consumer goods and capital goods. Although both countries had
identical production capabilities in 2010, Panchal had a larger population and a greater need for consumer goods. In
2010, Panchal produced 60 million units of consumer goods and just enough capital to replace the existing capital
that was worn out in that year. Anga produced only 50 million units of consumer goods and more than enough capital
goods to replenish its depreciated capital.
Assume that both countries produce efficient levels of output. On the following graph, use the black point (X symbol)
to show the combination of goods that were produced in Panchal in 2010. Dashed drop lines will automatically extend
to both axes. Then use the red point (cross symbol) to show the combination of goods that were produced in Anga in
2010.
CAPITAL GOODS (Millions of units)
100
80
60
40
20
0
20
PPC of Both Countries
2010
Panchal
Anga
40
60
80
100
CONSUMER GOODS (Millions of units) Help Clear All
By producing capital goods over and above the amount necessary to replenish the stock of depreciated capital, an
economy can increase its productivity. In this case,
will experience greater economic growth in the
future.
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