$Y = $P S * S + $P T * T. (* means multiplied) Let $Y = $500, $P S = $5, and $P T = $2.50 1) Graph this PPF (S on the horizontal axis and T on the…

$Y = $PS * S + $PT   * T.   (* means multiplied)

Let   $Y = $500, $PS = $5, and $PT = $2.50

1)    Graph this PPF (S on the horizontal axis and T on the vertical axis).

2)    What is the slope of the PPF? Does it change as we move along it? Why or why not?

3)    What is the relative price of S in terms of T? What does that phrase: “relative price of S in terms of T…” translate into in English? Please explain.

4) What is the relative price of T in terms of S?