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1. Draw a production possibilities curve (PPC) with an aggregate measure of medical services, Q, on the horizontal

axis and an aggregate measure of all other goods (and services), Z, on the vertical axis. Illustrate the curve for each of the following and discuss the implications of the following changes on the quantities of medical services and all other goods.

A. A movement down along the curve.

B. A movement from the interior of the curve to a northeasterly point on the curve.

C. An increase in the quantity of labor in the economy.

D. A technological discovery that increases the production of Z.

F. Draw a PPC to illustrate at least one technically efficient resource allocation between medical services and all other goods. Is this also allocatively efficient? Why or why not?

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