What is the opportunity cost of the eighth computer

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Reference no: EM13222794

Suppose either computers or televisions can be assembled with the following labor inputs:

Units produced 1 2 3 4 5 6 7 8 9 10
Total labor used 3 7 12 18 25 33 42 54 70 90

(a) Draw the production possibilities curve for an economy with 54 units of labor.

(b) What is the opportunity cost of the eighth computer?

(c) Suppose immigration brings in 36 more workers. Redraw the production possibilities curve to reflect this added labor. Label the new curve P90.

(d) Suppose advancing technology (e.g., the miniaturization of electronic circuits) increases the productivity of the 90-laborer workforce by 20 percent. Draw a third production possibilities curve (PT) to illustrate this change.

Reference no: EM13222794

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