Imagine a society that produces Capital goods and consumer goods. a. Draw a production possibilities frontier for capital and consumer goods. Explain why it most likely has a bowed-out shape. b. Show...

Imagine a society that produces Capital goods and consumer goods.

a. Draw a production possibilities frontier for capital and consumer goods. Explain why it most likely has a bowed-out shape.

b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient.

c. Imagine that the society has two political parties, party A (who wants capital goods) and the party B (who want a consumer goods). Show a point on your production possibilities frontier that the part A might choose and a point the party B might choose.

d. Imagine that our progressive neighboring country reduces the size of its consumer goods. As a result, both the Party A and B reduce their desired production of consumer goods by the same amount. Which party would get the bigger “technology dividend,” measured by the increase in capital production? Explain.