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The production possibilities frontier (PPF) is a simplified economic model that illustrates the different combinations of two products that an economy can produce given the
The production possibilities frontier (PPF) is a simplified economic model that illustrates the different combinations of two products that an economy can produce given the resources it has available. Assume that the country of Brazil can produce only soybeans or corn and answer each of the following questions. A. If a drought affects 30% of the farmland used to grow soybeans and corn, which direction will Brazil's PPF shift (your answer should be "outwards" or "inwards") and why? B. Brazil decides to increase the production of corn. Explain the opportunity cost of this decision, and reference the visual effect this would have on the PPF model itself. C. If Brazil's soybean and corn industries begin facing labor shortages or limited access to necessary machinery, would they be producing on, outside, or inside it's PPF? Explain
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