There are two goods, A and B. Suppose the production possibilities frontier (PPF) of a country is given by QB = (2500 - 0.25×QA2)1/2. The slope of this PPF is - 0.25QA/QB (notice that it is not constant, it depends on how much of each good is produced, so if QA = 8 and QB = 4, the slope is -0.5).
Q1:If the relative price of good A in terms of good B is 2/3, how much of good A will the economy produce?
Q2:If the relative price of good A in terms of good B is 2/3, how much of good B will the economy produce?