relevant example because many state governments have been forced to cut the provision of medical care due to increased expenditures on prisons.) Alternative Medical Care Prisons 160 120 80 40 20 40 60 80 Graph the production possibilities curve. Then discuss the following: hat is the opportunity cost of the first 20 units of medical care? Of the last 20 units (from 60 to 80) of medical care? a. W b. Add point F (40 units of medical care, 60 units of prisons). What does it represent?
Prisons 160 120 80 40 Medical Care 20 40 60 80 The production possibilities curve is the possible tradeoff of producing combinations of goods with constant technology and resources per unit time. The opportunity cost of the first 20 units of medical care is 40 units of prisons. The opportunity cost of the last 20 units (from 60 to 80) of medical care is also 40 units of prisons. A point F (40 units of medical care, 60 units of prisons) is inside the curve, so it represents inefficient combination of alternatives.