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Draw a PPF for The Federated States of Econesia (FSE) which can produce 1,000 diamonds if it devotes all resources to diamond production or 4,000 automobiles if it devotes all resources to automobile production. There is an increasing opportunity cost of producing each good.
a) Draw a point "A" on your graph indicating the production of 500 diamonds and 2,000 automobiles.
b) Draw a point "B" on the graph that would be an autarky equilibrium point. Be sure to add all information to help someone else realize that this is an autarky equilibrium point.
c) Draw a point "C" on the PPC that lies along the same CIC as point A. Label this CIC0.
d) Now the FSE opens to international trade.
Thomas consumes coffee (C) and doughnuts (D). His budget line was described by the equation D = 20 - 2C. At a later time
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