Problem
1. If the production efficiency locus in the Edgeworth box diagram were the diagonal of the box, what would be the shape of the production-possibilities frontier, assuming constant returns to scale in both industries?
2. Evaluate the statement: If a country's production- possibilities frontier demonstrates increasing opportunity costs, this means that each of the industries within the country must be operating in a context of decreasing returns to scale.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.