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2. Production Possibilities Curve. Consider the following car manufacturer production possibilities: A B C D E F G Cars 0 10 18 25 30 33
2. Production Possibilities Curve. Consider the following car manufacturer production possibilities: A B C D E F G Cars 0 10 18 25 30 33 35 Trucks 45 42 39 33 25 15 0 A. Graph the Production Possibilities Curve. ( /1) B. What are the consequences of the manufacturer producing at combination A? Combination G? In reality, is either combination desirable? Why/why not? ( /3) C. Plot the combination with 25 cars and 40 trucks and label it "X." Plot the combination with 25 cars and 20 trucks and label it "Y." Explain what occurs at these points. ( /4) D. Explain with examples how your graph shows 5 concepts: opportunity costs, efficiency, unemployment, the law of increasing opportunity costs, and economic growth. ( /5) E. Define the terms Productive Efficiency and Allocationficiency, and then provide explanations of the terms using the chart data provided. ( /2)
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