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Suppose that the country experiences an increase in its capital stock. How would the edgeworth box change? How would the production possibilities frontier change as a result? Could the could coutry now obligate more of both goods than before the increase in capital stock or more of only the capital intensive good. Explain.

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This solution discusses capital stock and PPF shifts.

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The Edgeworth box would be stretched upward since the vertical capital axis is extended while the horizontal labor axis has the same ...

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