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3) Imagine the fictitious island of Xanadu has an economy that can produce only carrots and potatoes. (i) Explain the possible effects on the economys
3) Imagine the fictitious island of Xanadu has an economy that can produce only carrots and potatoes. (i) Explain the possible effects on the economys production possibility curve (PPC) of an advance in technology affecting the production of both carrots and potatoes. [20 marks] (ii) What if the advance in technology only affected the production of carrots? [20 marks]
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