A country can produce either 116 units of good Y or 210 units of good X. If they want to produce 36 units of good Y, how many units of good X are they able to produce?
Answer
A country can produce either 116 units of good Y or 210 units of good X. Thus in order to produce 116 units of Y he has to sacrifice 210 units of good X. Assuming that rate of substitution is constant implies in order to produce 1 units of Y he has to sacrifice 210/116 units of good X. Thus in order to produce 36 units of Y, He has to sacrifice (210/116)*36 = 65 units of X.
Thus along with 36 units of Good Y, A country can produce 210 - 65 = 145 units of Good X.
Hence, If they want to produce 36 units of good Y, a country will be able to produce 145 units of Good X.
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