econ he blue curve in the graph below represents the Pro rate at which we can tr

Question

econ

he blue curve in the graph below represents the Pro rate at which we can trade other goods in exchange for energy (such as oil or natural gas) 2 duction Possibility Frontier of the U.S. The red line represents the 0 8 sents the U.S. PPF 130 100 90 80 70 60 2 50 Ö 20 0 20 40 60 80 100 120 Energy (Quadrillion BTUs per period) ecide we'd like to Suppose we start out at point A, producing and consuming 60 units of energy per period, but we c consume 80 units of energy per period instead. If we produce those additional 20 units domestically (moving from A to C on the graph) we sacrifice units of other goods, but if we import those additional 20 units of other goods units (going from A to B) we sacrifice only

Explanation / Answer

From the graph we can see that a movement from point A to point C results in a reduction of 20 units of all other goods. Therefore if we decide to consume 80 units of energy, and we produce those additional 20 units from 60 to 80 we actually sacrifice 20 units of all other goods.

But if we import the 20 units and move from point A to point B please sacrifice only 10 units of other goods.

So the first blank has 20 units and the second blank has 10 units

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