1. Production Possibilities for Mexico

Suppose that Canada is faced with the following output combinations for capital

goods and consumption goods.

Option Capital Goods Consumer Goods

A 0 96000

B 4000 72000

C 8000 48000

D 12000 24000

E 16000 0

1. Graph the production possibilities curve for Mexico with capital goods on the

x-axis and consumer goods on the y-axis.

1. Solve for the slope between Options A and B.
2. State the cost ratio between the two goods in Mexico.