2. Given the following diagram of a production possibilities frontier for a country. Assume that this country produces only two types of goods, capital goods (K) and consumer goods (C). (Graph is not drawn to scale.) CAMITAL GOOAS (K) Laco,2s0) BC1o9zo0) cca00, 1s0) CONSUMER coss (C) a. What is the opportunity cost of producing 25 more units of capital goods if this economy is currently producing at point B? b. What is the opportunity cost of producing 25 more units of consumer goods if this economy is currently producing at point B? e. What is the opportunity cost of producing 1 more unit of capital goods if this economy is currently producing at point C? d. What is the opportunity cost of producing 1 more unit of consumer goods if the economy is currently producing at point D? e. Suppose that there is a technological improvement in producing consumer goods that results in twice as many units of consumer goods being produced from the available resources in this economy. Draw the new production possibility frontier for this economy given this change. Assume that there are no changes in technology with regard to cupital good production.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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please do a,b,c,d

2. Given the following diagram of a production possibilities frontier for a country. Assume that this
country produces only two types of goods, capital goods (K) and consumer goods (C). (Graph is
not drawn to scale.)
CAPITAL GOOAS (K)
LAco,2s0)
BCA09 zo0)
cc200, Iso)
D(300, l00)
ECGO0,0)
CONSUMER
CosS (C)
a What is the opportunity cost of producing 25 more units of capital goods if this
economy is currently producing at point B?
b. What is the opportunity cost of producing 25 more units of consumer goods if this
economy is currently producing at point B?
c. What is the opportunity cost of producing 1 more unit of capital goods if this
economy is currently producing at point C?
d. What is the opportunity cost of producing 1 more unit of consumer goods if the
economy is currently producing at point D?
e. Suppose that there is a technological improvement in producing consumer goods that
results in twice as many units of consumer goods being produced from the available
resources in this economy. Draw the new production possibility frontier for this
economy given this change. Assume that there are no changes in technology with
regard to capital good production.
Transcribed Image Text:2. Given the following diagram of a production possibilities frontier for a country. Assume that this country produces only two types of goods, capital goods (K) and consumer goods (C). (Graph is not drawn to scale.) CAPITAL GOOAS (K) LAco,2s0) BCA09 zo0) cc200, Iso) D(300, l00) ECGO0,0) CONSUMER CosS (C) a What is the opportunity cost of producing 25 more units of capital goods if this economy is currently producing at point B? b. What is the opportunity cost of producing 25 more units of consumer goods if this economy is currently producing at point B? c. What is the opportunity cost of producing 1 more unit of capital goods if this economy is currently producing at point C? d. What is the opportunity cost of producing 1 more unit of consumer goods if the economy is currently producing at point D? e. Suppose that there is a technological improvement in producing consumer goods that results in twice as many units of consumer goods being produced from the available resources in this economy. Draw the new production possibility frontier for this economy given this change. Assume that there are no changes in technology with regard to capital good production.
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