13. (LO 6) Assume that an economy can produce either 300 tonnes of coffee and no rubber,...

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13. (LO 6) Assume that an economy can produce either 300 tonnes of coffee and no rubber, or 100 tonnes of rubber and no coffee. You may further assume that this 3:1 coffee/rubber ratio is constant. Draw a production possibilities curve for this economy with coffee on the vertical axis. Next, indicate with the letters a and b an increase in rubber production. Finally, illustrate with a triangle the cost of this additional rubber.

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Principles Of Macroeconomics

ISBN: 9780226818399

8th Edition

Authors: Sayre, J.E.; Morris, A.J.

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