Spacy, an island to the West of the Indian Ocean, has a community that is faced...

 

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Spacy, an island to the West of the Indian Ocean, has a community that is faced with threats of military invasions from its neighbours and riots from its citizens due to hunger. Therefore, the people have decided to produce the following goods. 100 units 75 units. 50 units Military goods 25 units 40 units 60 units Consumer goods (a) Using the data in the table above, draw Spacy's PPF (b) What is the economic problem that Spacy's PPF seeks to address? (c) What are the economic questions that Spacy's PPF seeks to address? (d) What is opportunity cost of increasing the production of consumer goods from 40 units to 60 units? (e) Suppose Chambia, a country located to the north of Spacy, dropped a bomb on Spacy's agricultural fields. Indicate on the graph you drew in part (a) above what would happen to Spacy's PPF. Spacy, an island to the West of the Indian Ocean, has a community that is faced with threats of military invasions from its neighbours and riots from its citizens due to hunger. Therefore, the people have decided to produce the following goods. 100 units 75 units. 50 units Military goods 25 units 40 units 60 units Consumer goods (a) Using the data in the table above, draw Spacy's PPF (b) What is the economic problem that Spacy's PPF seeks to address? (c) What are the economic questions that Spacy's PPF seeks to address? (d) What is opportunity cost of increasing the production of consumer goods from 40 units to 60 units? (e) Suppose Chambia, a country located to the north of Spacy, dropped a bomb on Spacy's agricultural fields. Indicate on the graph you drew in part (a) above what would happen to Spacy's PPF.

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a To draw Spacys PPF Production Possibility Frontier we will use the data given for the production of military goods and consumer goods The PPF repres... View the full answer