Illustrate the principle of increasing opportunity cost

Reference no: EM1313806

The table below is a production possibility table for the fictional country of Myopia. Use it to construct the corresponding production possibility curve.

a. From your curve what values do you get for A and B in the table below?
b. Explain the meaning of a production possibilities curve.
c. What is assumed to be constant when we draw that curve?
d. How is a point on the curve different from (1) a point below the curve and (2) a point above the curve?
e. How does this curve illustrate the concept of opportunity cost?
f. How does it illustrate the principle of increasing opportunity cost?

Guns	Butter
0	20
5	18
7	A
10	14
15	8
B	5
20	0

Reference no: EM1313806

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