1. Assume that a certain simplified economy produces only two goods, X and Y, with given resources and technology. The following table gives the various possible combinations of the production of the two goods (all units are measured in millions of tons). Good X Good Y Opportunity Cost of good X Production possibility A B C D 0 2 4 6 100 90 60 20 A. Calculate the opportunity cost of the production of good X at each point. What law does the trend in those values exhibit? B. What changes are required for this economy to shift the PPF outward? 2. The demand for tickets to an Ethiopian Camparada film is given by D(p)= 200,000- 10,000p, where p is the price of tickets. If the price of tickets is 12 Birr, calculate point elasticity of demand for tickets and draw the demand curve.
