A dairy produces butter and ice cream. The marginal cost of producing each of these products increases
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A dairy produces butter and ice cream. The marginal cost of producing each of these products increases as more is produced.
Draw the firm's PPF. Label it PPF1.
The dairy adopts a new technology that allows it to use fewer resources to make ice cream.
Draw a PPF that shows the impact of the new technology. Label it PPF2.
With this new technology, the opportunity cost of producing a tonne of butter ______ and the dairy is ______ efficient.
A. increases; equally
B. equals the opportunity cost of producing a tonne of ice cream; more
C. remains the same; less
D. decreases; more
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