The following is a production possibilities table for war goods and civilian goods: Production alternatives      A     B    C    D    E Automobiles         0     2     4    6     8 (in millions) Guided missiles  30   27   21  12    0 (in thousands)     •Show these production possibilities data graphically. •What does points on the curve indicate? •If the economy is currently at point C, what is the cost of 1 million more automobiles? Of more guided missiles?

Essentials of Economics (MindTap Course List)
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ISBN:9781337091992
Author:N. Gregory Mankiw
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Chapter3: Interdependence And The Gains From Trade
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The following is a production possibilities table for war goods and civilian goods:

Production alternatives

     A     B    C    D    E

Automobiles         0     2     4    6     8

(in millions)

Guided missiles  30   27   21  12    0

(in thousands)

 

 

•Show these production possibilities data graphically.
•What does points on the curve indicate?
•If the economy is currently at point C, what is the cost of 1 million more automobiles? Of more guided missiles?
•Suppose improvement occurs in the technology of producing guided missiles but not in the production of automobiles. Draw the new production possibilities curve
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