2. Suppose a country which produces only agricultural goods and electronic goods. Both goods use capital and labour as production inputs, however, the agricultural goods are assumed to be more labour-intensive. On three separate graphs, draw the "original" production possibility boundary (electronic goods on the horizontal axis, agricultural goods on the vertical axis) and illustrate each of the following situations: a. the country observes large increases in immigration; b. there is a technological improvement in the production of military goods only; C. a neighbouring country threatens to invade and the country responds by devoting more resources to military goods.

2. Suppose a country which produces only agricultural goods and electronic goods. Both goods use capital and labour as production inputs, however, the agricultural goods are assumed to be more labour-intensive. On three separate graphs, draw the "original" production possibility boundary (electronic goods on the horizontal axis, agricultural goods on the vertical axis) and illustrate each of the following situations: a. the country observes large increases in immigration; b. there is a technological improvement in the production of military goods only; C. a neighbouring country threatens to invade and the country responds by devoting more resources to military goods.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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