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2 Copyright © 2006 Nelson, a division of Thomson Canada Ltd. Suppose Peyton and Brett fend for themselves: s Each consumes what they each produce. s So, the production possibilities frontier is also a consumption possibilities frontier. Copyright © 2006 Nelson, a division of Thomson Canada Ltd. s Let’s compute the opportunity costs of producing each good for each person: (let’s ignore the units of measurement for now). For Peyton: s To get 32 potatoes, give up 8 meat To get 1 potato, give up ¼ meat The opp.cost of a potato = ¼ meat The opp.cost of a meat = 4 potatoes Copyright © 2006 Nelson, a division of Thomson Canada Ltd. For Brett: s To get 48 potatoes, give up 24 meat To get 1 potato, give up ½ meat The opp.cost of a potato = ½ meat The opp.cost of a meat = 2 potatoes.
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