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Macro Unit 1 1.3- The Production Possibilities Curve Part 2 - Practice- Assume that the economy of LaMania can produce robots (capital goods) and toy

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Macro Unit 1 1.3- The Production Possibilities Curve Part 2 - Practice- Assume that the economy of LaMania can produce robots (capital goods) and toy drones (consumer goods). Use the table below to answer the questions Goods Produced C D Robots Drones 20 15 10 9. Use the numbers in the table to draw a production possibilities curve on the graph to the right. Be sure to label the axis and each combination (A-E) 10. Calculate the opportunity cost if LaMania switched from producing combination A to producing B. 11. Assume that robots are capital goods. On your graph, show the long-term effect of a resource/was technological improvement that increases the ourHero.com production of robots. Explain below. 12. Assume the economy of LaMania intentionally decides to produce combination D rather than combination B. What is the short term result and long-run trade-off of this decision? Explain. Part 3 - Making Connections- Compare the production possibilities of Luxland and LaMania to answer the following questions: 13. Which of the two economies represents the idea of constant opportunity cost? Explain. 14. Which of the two economies represents the idea of increasing opportunity cost? Explain. 15. Assume that your classmate suggested that both graphs represent constant opportunity costs because movement from combinations A to B, B to C, and C to D stays the same for each economy. Explain why this is incorrect

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