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Commentary on the questions

On page 6 Peter Smith set some questions to think about and tackle. Here he provides some answers as well as some additional explanations

1 Curve A is a production possibility frontier (PPF, sometimes known as a production possibility curve (PPC)). This shows the combinations of two goods that can be produced with a given set of resources. The x-axis should be labelled as the quantity of one of the two goods, and the y-axis as the quantity of the other.

This could be used for a firm choosing the combination of two particular goods that could be produced:

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