a) Draw a production possibilities curve (PP1). Label the horizontal axis Tools and the vertical axis Grain. Now, assume the development of a new technology that can be used only in the tool industry, and that it increases tool output by 50 percent. 6. Assume that the economy of Finhorn faces the following production possibilities: QUANTITIES PER YEAR C b) Draw a new production possibilities curve (PP2) that reflects this new technology. Grain 25 40 50 Tools 12 8 4. c) If Finhorn produced 12 units of tools per year, how many units of grain could be produced after the introduction of the new technology?

a) Draw a production possibilities curve (PP1). Label the horizontal axis Tools and the vertical axis Grain. Now, assume the development of a new technology that can be used only in the tool industry, and that it increases tool output by 50 percent. 6. Assume that the economy of Finhorn faces the following production possibilities: QUANTITIES PER YEAR C b) Draw a new production possibilities curve (PP2) that reflects this new technology. Grain 25 40 50 Tools 12 8 4. c) If Finhorn produced 12 units of tools per year, how many units of grain could be produced after the introduction of the new technology?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter3: Interdependence And The Gains From Trade

Section: Chapter Questions

Problem 4PA

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