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Consider an economy that produces two goods, x and v, The production possibilities frontier (FPF) for this economy is lingar (i.e. a straight line) and
Consider an economy that produces two goods, x and v, The production possibilities frontier (FPF) for this economy is lingar (i.e. a straight line) and the current production pointis x = 100 and v = 30. The marginal rate of transformation (MRTxy) is constant and egualto 2 for the entire PPF. The economy also has an economy - wide indifference curve that is bowed in to the origin. You know that the marginal rate of substitution (MR5xy) is equal to % . What is the optimal production value of v 7
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