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d. both full employment and full production 5. The production possibility curve is a. concave b. convex c. linear d. positive 6. The law of demand can be best be explained in terms of a. supply b. complimentary goods c. the rationing function of prices d. diminishing marginal utility 43 Government of Puducherry Directorate of School Education a. Draw the production possibility frontier for this economy, and illustrate the autarky equilibrium. It is not really production, of course, but the maximum quantities of the two goods available to the country, and , are now fixed. Since the country can consume these amounts or less, the PPF may be thought of as a rectangle with corner at .

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