Imagine a society that produces military goods and consumer goods, which we will call "guns" and "butter". • Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. • Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. • Imagine that society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point that the Doves might choose.

Imagine a society that produces military goods and consumer goods, which we will call "guns" and "butter". • Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape. • Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient. • Imagine that society has two political parties, called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point that the Doves might choose.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter2: Thinking Like An Economist

Section: Chapter Questions

Problem 2PA

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