half as much. In short, the budget constraint rotates clockwise around the vertical intercept, steepening as

it goes and the opportunity cost of bus tickets increases.
538

2. Because of the improvement in technology, the vertical intercept of the PPF would be at a higher level of

healthcare. In other words, the PPF would rotate clockwise around the horizontal intercept. This would

make the PPF steeper, corresponding to an increase in the opportunity cost of education, since resources

devoted to education would now mean forgoing a greater quantity of healthcare.

3. No. Allocative efficiency requires productive efficiency, because it pertains to choices along the production

possibilities frontier.

4. Both the budget constraint and the PPF show the constraint that each operates under. Both show a tradeoff

between having more of one good but less of the other. Both show the opportunity cost graphically as the

slope of the constraint (budget or PPF).
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