Econ 4th Edition by William McEachern

Exercise 1

GROWTH AND THE PPF Use the production possibilities frontier (PPF) to demonstrate economic growth.
a. With consumption goods on one axis and capital goods on the other, show how the combination of goods selected this period affects the PPF in the next period.
b. Extend this comparison by choosing a different point on this period's PPF and determining whether that combination leads to more or less growth in the next period.