Draw a production possibilities curve that shows a constant opportunity cost. Why do these two goods have a constant opportunity cost? (Answer in a text box below the graph). Also show two different allocatively efficient points. Why would a society choose one point over another?
Draw a production possibilities curve for two goods that shows an increasing opportunity cost. Why do these goods have an increasing opportunity cost? On your graph include each of the following points: a productively efficient point, an impossible or unattainable combination of production, and a combination that shows unemployment.
-New robot making technology
-Decrease in the demand for pizza
-Mad cow disease kills 75% of cows
-Destruction of oil refineries resulting from a hurricane in the Gulf of Mexico
-Faster computer hardware
Many workers unemployed
Significant increases in education