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PROBLEM #3 The production possibilities of a small economy, given its available resources, are as follows: Opportunity Cost per Gallon of Yogurt Point Rice (Pounds)

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PROBLEM #3 The production possibilities of a small economy, given its available resources, are as follows: Opportunity Cost per Gallon of Yogurt Point Rice (Pounds) Yogurt (Gallons) (in Pounds of Rice) 191 0 185 30 145 50 75 60 E 0 65 a. Using the information given above, complete the table, by finding the opportunity cost (pounds of rice given up) per gallon of yogurt, between each of the points (A to B; B to C; C to D; and D to E). b. Sketch a graph of the production possibilities frontier for this small economy, with rice on the vertical axis and yogurt on the horizontal axis. Clearly state whether your graph bows outward, bows inward, or is linear. C. Does the Law of Increasing Opportunity Costs apply to this small economy? d. If the economy wishes to produce 60 gallons of yogurt and 90 pounds of rice, is this combination attainable, efficient, or unattainable

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