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Home has 1,200 workers. It can produce two goods, apples(QA) and bananas(QB). The unit labor requirement in apple production is 3, while it is 2 in banana production.
a. Draw the PPF for home(with the production of apples on x-axis). what is the opportunity cost of apples in terms of bananas?
b. Draw the relative supply curve.
c. Draw the relative demand curve when the demand for apples/demand for bananas = the price of bananas/price of apples. What is the equilibrium world relative price of apples?
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