1. Production Possibilities
   1. Graph the production possibilities curve for Country X with capital goods on the Country X is faced with the following output combinations for capital goods and consumer goods.

Option Capital Goods Consumer Goods

A 0 22000

B 8000 200000

C 16000 16000

D 24000 100000

E 32000 0

Complete parts a, b, c, and d.

a. Graph the production possibilities curve for Country X with capital goods on the

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

b. Does the Law of Increasing Opportunity Costs hold for this example? Explain

why or why not.

c. As you move from point B to point C, what is the cost of one more consumer

good?

d. If Country X wanted to experience higher levels of economic growth over the

next few years, would they be better off choosing option B (a combination of

8000 capital goods and 200,000 consumer goods) or option D (a combination of

24000 capital goods and 100,000 consumer goods)? Explain.