What would be the shape of production-possibilities frontier

Reference no: EM132177932

Question: 1. If the production efficiency locus in the Edgeworth box diagram were the diagonal of the box, what would be the shape of the production-possibilities frontier, assuming constant returns to scale in both industries?

2. Evaluate the statement: If a country's production- possibilities frontier demonstrates increasing opportunity costs, this means that each of the industries within the country must be operating in a context of decreasing returns to scale.

Reference no: EM132177932

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