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2. A university produces two commodities: research and teaching. The university uses the resources include faculty and staff, libraries, classroom, labs and so on.

2. A university produces two commodities: research and teaching. The university uses the resources include faculty and staff, libraries, classroom, labs and so on. The following schedule indicates some points on the university's PPF: A Research 900 Teaching 0 B 750 20 600 45 D 450 75 E 300 110 F 150 150 G 0 200 i) Does research production by the university exhibit increasing, constant or decreasing per unit opportunity costs? ii) Graph the university's PPF and indicates efficient, inefficient and impossible points. iii) Suppose the university is at point B but would like to alter production to point C. What would be the per-teaching unit opportunity cost of producing the extra teaching units?

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