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Given the following diagram: Production Possibilities GRAPH Capital Goods 11 A B 10 C D 6 E T 6 S 2 1 LL F


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Given the following diagram: Production Possibilities GRAPH Capital Goods 11 A B 10 C D 6 E T 6 S 2 1 LL F G H Production Possibilities J 0 1 2 3 4 5 6 7 8 9 Consumption Goods CALCULATIONS Consumption Goods 0 2- 3 4 5 6 7 8 Reset Consumption Goods Produced 4.0 Consumption Goods Gained/Given Up 0.0 Capital Goods Produced 7.5 Capital Goods Gained/Given Up 0.0 Instructions: Move the slider for the consumption goods at the bottom of the graph to complete the calculations. Round your answers to one decimal place. What is the opportunity cost of producing additional consumer goods: Instruction: enter all response as a positive number rounded to one decimal place. a. The first unit (from A to B)? units of capital goods units of capital goods b. The third unit (C to D)? c. The fifth unit (E to F)? units of capital goods d. The seventh unit (G to H)?| units of capital goods e. Are these opportunity costs increasing, constant or decreasing as we produce more consumer goods? (Click to select) f. As more capital goods are produced, what happens to the opportunity cost in terms of consumer goods (moving in the opposite direction)? (Click to select) g. If the opportunity costs were constant for the entire PPC, what shape would the curve have? (Click to select) V

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