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The economy has limited labor-time resources per year in its production possibility frontier. If it produces more manufacturing goods (denoted M), then it can produce
The economy has limited labor-time resources per year in its production possibility frontier. If it produces more manufacturing goods (denoted "M"), then it can produce fewer research ideas ("R") - meaning, we have a downward-sloping PPF between "M" and "R." If the economy allocates more time to produce research ideas in that year, then it can produce even more manufactured goods later. Put "M" on horizontal-axis, and "R" on vertical-axis. (a) (6 points) What would happen to the PPF when the economy now produces more research ideas? What would eventually happen to the opportunity cost of producing "M" when the economy produces more "R" now? (b) (6 points) How would the movement of onshoring production - moving the manufacturing goods back to the domestic economy - affect the economy's PPF? Discuss why
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