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Suppose that in Fig 2-2, the nation currently is producing combination D in the table and on the graph of the production possibilities curve. What is the opportunity cost of producing 20 million more tablet devices and moving to production combination F?

Short Answer

Expert verified

17.5 million

Step by step solution

01

Step1. Given information

Nation is given to be producing at combination D on the PPC curve.

02

Step2. Explanation

For moving to D from F, i.e. increasing 20 million tablet devices per year, the identified opportunity cost as per the given Production Possibility Frontier (PPF) is letting go of 17.5 million smartphones.

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