The graph plots investment goods (units per time) versus consumer goods (units per time). The plotted line falls through the following points: (0, 9), (3, 8), (5, 7), (6, 6), (7, 4), (8, 0).

 

Use the figure above to answer the following questions.

What is the opportunity cost of increasing consumer goods from 3 units to 7 units?

What will happen to future production possibilities if investment decreases now?

What will happen to future production possibilities if only consumer goods are produced now?

Transcribed Image Text:

Investment Goods(units per time) 10 9 8 7 6 50 4 3 Production Possibilities Curve 2 1 0 1 2 3 4 5 6 7 7 8 9 10 Consumer Goods(units per time) Investment Goods(units per time) 10 9 8 7 6 50 4 3 Production Possibilities Curve 2 1 0 1 2 3 4 5 6 7 7 8 9 10 Consumer Goods(units per time)