1. Two economies, the United States and country G, cur- rently have identical production possibilities frontiers, CI, but have chosen differing combinations of capital and consumer goods as indicated. Illustrate how these choices will affect economic growth by adding a PPF for the United States ten years into the future, and then one for country G ten years from now.
2. Sketch a per-worker production function in the diagram that illustrates the law of diminishing marginal returns. Identify the level of output per worker produced given k capital per worker.