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Type of production (in thousands of clients billed in one year) A B C D E

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In-patients 0 2 4 6 8

Out-patients 30 27 21 12 0

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a. Graph the information presented in the above table. (Hint: the production possibilities curve is curved because opportunity costs increase as the hospital becomes more specialized.)

b. What is opportunity cost of the hospital serving 4,000 rather than 2,000 in-patients yearly?

c. What is the opportunity cost of the hospital serving 21,000 rather than 12,000 out-patients yearly?