Objective
Using Production Possibilities Curve;
Instructions
Consider the Economy of the United States. Consider also two broad categories of good, Consumer Goods that
are final goods and services purchased by consumers and Capital Goods, those that are bought by Firms as new
buildings and productive equipment.
• Draw the Production Possibility Curve for the United States which assume that there are increasing
opportunity costs between the two broad categories of goods.
• Place point A on the graph where you believe the economy is today. Briefly, but thoroughly justify your
placement.
• Place point B on your graph where you believe the economy SHOULD BE. Briefly, but thoroughly justify your
placement. Further, if point A and point B are not the same, explain why.