Suppose that the profit a Honda dealership makes on selling an Accord is random and is given by the following probability distribution:
September 3, 2020
Points on a budget constraint represent combinations of the goods that exactly use up the household”s income, given market prices.
September 3, 2020

Using either a graph or table (use the one in question #10 on page 20 as a guide) use two goods to construct a production possibilities curve. Clearly explain what a variety of different points on the curve mean. What would make the curve expand or contract? Why is efficiency lost at the extremes, as when substantially more of one good and very little of another is produced?

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