For my economy class I need to annswer these questions but I just dont get/cant find...

For my economy class I need to annswer these questions but I just dont get/cant find the right inf.

The Presentville – Futureville case: 1. Explain what motivated each group to make the decisions they made.

Expert Solution

the thing i understand is here,

other things equal, we can expect Futureville's future production possibilities curveto be farther to the right than Presentville's future production possibilities curve. Bycurrently choosing an output more favorable to technological advances and to increasesin the quantity and quality of resources, Futureville will achieve greater economic growththan Presentville. In terms of capital goods, Futureville is choosing to make larger currentadditions to its “national factory” by devoting more of its current output to capital thanPresentville. The payoff from this choice for Futureville is greater future productioncapacity and economic growth. The opportunity cost is fewer consumer goods in thepresent for Futureville to enjoy.

Is Futureville's choice thus necessarily “better” than Presentville's?

That, we cannot say.The different outcomes simply reflect different preferences and priorities in the twocountries. But each country will have to live with the economic consequences of its choice.

Rahul Sunny answered 2 years ago

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