1. Imagine a country experiences an increase in the resources used to produce a good depicted on the y-axis of a PPF. How would this change the countries PPF? a)The y-intercept would decrease but the x-axis would remain the same b)The y-intercept would increase but the x-axis would remain the same c)The x-intercept would decrease but the y-axis would remain the same d)The x-intercept would increase but the y-axis would remain the same 2. Consider the curved PPF below. What is happening to the opportunity cost of spices as the country produces more spices? a)The opportunity cost is staying the same b)The opportunity cost is increasing c)The opportunity cost is decreasing
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The options for the last one are: constant, increasing, or decreasing. Suppose that the economy of El Paso creates only cowboy boots and pecans. The production possibilities frontier (PPF) per year for El Paso is illustrated in the graph and is currently producing at the point labeled A. Move point B to show the economy efficiently producing one thousand more cowboy boots. Now, determine the opportunity cost of producing an additional 1,000 cowboy boots, i.e., shifting from point A to point B. Enter your answer specified to one decimal place. opportunity cost: pecans Shift point C to indicate El Paso increasing production of cowboy boots from point B by another thousand. Determine the opportunity cost of shifting from point B to point C. Enter your answer specified to one decimal place. opportunity cost: pecans This PPF exhibits what kind of opportunity costs?
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