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    Calc. opportunity cost from Production Possibility Frontier

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    Suppose an economy's production possibility frontier is given by X^2 + 4Y^2 = 100. When production of X is increased from 6 units to 8 units of X, what is the opportunity cost of the additional 2 units of X in terms of Y?

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    Solution Preview

    First, you should understand what production possibility frontier (hereby PPF) is. PPF is the set of all combinations of X and Y where the economy can ...

    Solution Summary

    Provides steps necessary to determine opportunity cost.