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10.Assume that there are two types of goods being exchanged in an economy, haircuts and cars. a.Draw the production possibility frontier. b.Assuming productivity of cars
10.Assume that there are two types of goods being exchanged in an economy, haircuts and cars.
a.Draw the production possibility frontier.
b.Assuming productivity of cars were to increase and that a new optimal bundle of consumption across the two items were to include the same quantity of cars as was consumed before the productivity increase, what happens to the price of cars relative to haircuts?
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