Capstone Papers-Economic Questions
Suppose that country A produces two goods (C and T) under conditions of constant opportunity costs. Given its resources, the maximum C that it can make is 240 units, and the opportunity cost of making one additional T is 2 units of C.
Reminder: In order to get full credit: you must show ALL calculations!!!
1. What is the maximum amount of T that it can produce?
2. Draw a graph of the PPF using the information above. On your graph, place T on the vertical axis and C on the horizontal axis. Be sure to label the axes, the numerical intercepts and the PPF.
3. What is the value of the slope?
4. What does this slope value represent?
