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Develop the production possibility frontier for Home Country

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Home has 1,200 units of labor available. It can produce two goods, apples and bananas. The unit labor requirement in apple production is 3, while in banana production is 2.

a) Derive the production possibility frontier mathematically.

b) Graph Home Country's production possibility frontier.

c) What is the opportunity cost of apples in terms of bananas?

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Solution Summary

Solution depicts the steps to develop a production possibility frontier (PPF) in the given case.

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a)
Let A be the number of units of apples produced and B be the ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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