Question

A country produces goods X and Y and has the following equation for its production

possibilities frontier: X³ + 2Y² = 96 or Y = (48 - 0.5X³)^1/2 = (48 – X³/2)^1/2

Again you are told that the economy is producing efficiently and that this time it has chosen to

produce and consume 3 units of X. At this point on the production possibilities frontier, you

would use calculus to obtain the opportunity cost of one more unit of Y in terms of X (correct to

two decimal points) as:

A) 0 B) 9.09 C) 5 D) 4.16 E) 1.15 F) 0.87

G) 0.50 H) 2 I) 0.63 J) none of the above

Answer 1

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