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Absolute Advantage Book Reviews Samples For Students
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1. Describe how a country producing more capital goods rather than consumer goods ends up in the future with a PPF that is larger than a country that produces more consumer goods and fewer capital goods?
PPF (Production Possibility Frontier) shows the maximum production level in the economy, assuming that the country produces only two products, which share same resources, available at the moment. In figure 1 the production trade off in the country is between consumer and capital goods. If the country is producing more capital goods, than consumer goods, as indicated by point A, it sacrifices producing consumer goods. However, ...
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