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Labels for Output Combinations Quantity of Cars Quantity of Cakes A 0 200 B 25 180 C 50 130 D 75 70 E 100 0
Labels for Output Combinations Quantity of Cars Quantity of Cakes A 0 200 B 25 180 C 50 130 D 75 70 E 100 0 Once you have drawn your Production Possibility Frontier answer the following questions. Can the country produce 100 cars and 100 cakes at the same time? Plot that point on your graph. Note where does this point lie relative to the production possibility frontier? What is the opportunity cost of increasing the output of cars from 25 to 50? What is the opportunity cost of increasing the output of cars from 75 to 100? Can you explain why the answers to parts b. and c. are not the same? What does this imply about the slope of the production possibility frontier
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