The graph shows the identical production possibilities of two countries, A and B. They face an increasing opportunity cost of economic growth. The production possibilities of country B are growing faster than country A. Draw a point at which country A might be producing. Label it A. Draw a point at which country B might be producing. Label it B. Draw country A's PPF after one year. Label it PPFA- Draw country B's PPF after one year. Label it PPFB. In the above example, what is the opportunity cost of economic growth? The opportunity cost of economic growth is OA. the production of new capital OB. the use of new technology OC. forgone current consumption OD. the increase in human capital 100 90- 80- 70- 60- 50- 40- 30- 20- 10- Capital goods (per person) PPF 0- 0 10 20 30 40 50 60 70 80 90 100 110 Consumption goods (per person) >>> Draw only the objects specified in the questic

The graph shows the identical production possibilities of two countries, A and B. They face an increasing opportunity cost of economic growth. The production possibilities of country B are growing faster than country A. Draw a point at which country A might be producing. Label it A. Draw a point at which country B might be producing. Label it B. Draw country A's PPF after one year. Label it PPFA- Draw country B's PPF after one year. Label it PPFB. In the above example, what is the opportunity cost of economic growth? The opportunity cost of economic growth is OA. the production of new capital OB. the use of new technology OC. forgone current consumption OD. the increase in human capital 100 90- 80- 70- 60- 50- 40- 30- 20- 10- Capital goods (per person) PPF 0- 0 10 20 30 40 50 60 70 80 90 100 110 Consumption goods (per person) >>> Draw only the objects specified in the questic

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The graph shows the identical production possibilities of two countries, A and B. They face
an increasing opportunity cost of economic growth.
The production possibilities of country B are growing faster than country A.
Draw a point at which country A might be producing. Label it A.
Draw a point at which country B might be producing.
Label it B.
Draw country A's PPF after one year. Label it PPFA.
Draw country B's PPF after one year. Label it PPFB.
In the above example, what is the opportunity cost of economic growth?
The opportunity cost of economic growth is
A. the production of new capital
B. the use of new technology
OC. forgone current consumption
D. the increase in human capital
100-
90-
80-
70-
60-
50-
40-
30-
20-
10-
Capital goods (per person)
PPF
0-
0 10 20 30 40 50 60 70 80 90 100 110
Consumption goods (per person)
>>> Draw only the objects specified in the question.

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Step 1: Meaning of Production Possibility Frontier (PPF)

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Step 2: Production Possibility Frontier for Country A and B

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