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1. GDP per capita in United States was about $45,000 in 2007. What will it be in the year 2015 if GDP per capita increases each year by?

a) 0 percent

b) 2 percent

2. Sketch a production possibilities curve based on Table 1.1., labelling combinations A-F. What is opportunity cost of raising missile production?

a) From 50 to 100?

b) From 200 to 250?

All production entails the opportunity cost: We can create more of output A only if we produce less of output B. The implied diminution in output B is the opportunity cost of output A.

317_Maximum combination goods.jpg

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M910547

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