1st homework reference

1st homework reference - Eco001 HW1: some reference answers...

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P60. 1.3 Increasing marginal opportunity costs means that as more and more of a product is made, the opportunity cost of making each additional unit rises. It occurs because the first units of a good are made with the resources that are best suited for making it, but as more and more is made, resources must be used that are better suited for producing something else. Increasing marginal opportunity costs imply that the production possibilities frontier is bowed to the right from the origin – that its slope gets steeper and steeper as you move down the production possibilities frontier. P61. 1.6 You would still have an opportunity cost represented by the next best use of your time. P61. 1.7 a. The production possibility frontier will be bowed out like Figure 2-2 because some economic inputs are likely to be more productive when making capital goods, and others are likely to be more productive when making consumption goods. b.
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This note was uploaded on 03/04/2010 for the course ECON 001 taught by Professor Caseyquinn during the Fall '08 term at Lehigh University .

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1st homework reference - Eco001 HW1: some reference answers...

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