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Suppose good X is relatively labour-intensive and good Y is relatively capital-intensive. Suppose good X is measured on the horizontal axis and good Y is
Suppose good X is relatively labour-intensive and good Y is relatively capital-intensive. Suppose good X is measured on the horizontal axis and good Y is measured on the vertical axis. Country 1 is relatively capital-intensive and Country 2 is relatively labour-intensive. What will be the relationship between the two countries' production possibilities frontiers (PPF)? Question 1 options: The relationship between the slopes of the two PPFs will vary for different output levels -- for some output levels, the PPF for Country 1 will be flatter than the PPF for Country 2 and for other output levels, the PPF for Country 1 will be steeper than the PPF for Country 2. The PPF for Country 1 will be steeper than the PPF for Country 2 for any given ratio of output levels. The PPF for Country 1 will have the same slope as the PPF for Country 2 for any given ratio of output levels. The PPF for Country 1 will be flatter than the PPF for Country 2 for any given ratio of output levels
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