1.A municipal government has a yearly budget of $80 million. The municipality must spend $1 million a year to hire and equip a police officer; it must spend $250 thousand a year on a schoolteacher. Assume the municipality does not spend its budget on anything else. Just cops & teachers. The police officer's job is to arrest the criminals, and a single police officer makes 10 arrests per year. The teacher's job is to teach, and a single teacher instructs 40 students a year.

A new app improves a police officer's ability to find criminals. As a result, police officer now makes 20 arrests per year, other things equal.

a.What is the new opportunity cost of arresting a criminal? Give the number (and units of measurement) & explain.

b.What happens to the production possibilities boundary? Explain.

What are the steps to a and b?