Answer to Question #134240 in Macroeconomics for navi

Question

A municipal government has a yearly budget of $50 million. The municipality must spend $1 million a year to hire and equip a police officer; it must spend $250 thousand a year on a schoolteacher. Assume the municipality does not spend its budget on anything else. Just cops & teachers. The police officer’s job is to arrest the criminals, and a single police officer makes 2 arrests per year. The teacher’s job is to teach, and a single teacher instructs 40 students a year.


Draw the municipality’s production possibilities boundary, placing the number of arrests on the vertical axis & the number of the students on the horizontal axis. Make sure to show the axis intercept points


What is the opportunity cost of arresting a criminal? Give the number & explain

Answer 1

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