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  • 20240219econ Paper 2 Practice

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    CHAN KWOK KING G9G-01
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    i) Economic growth refers to the potential increase in a country's GDP. Factors of production like capital and resources are managed to maximize profits. ii) In Guatemala, timber production causes a negative externality of deforestation that damages the environment. When marginal private costs (MPC) are greater than marginal social costs (MSC), there is a welfare loss. Only by decreasing production back to the point where MPC equals MSC will the externality be solved. iii) The "Feed the Future" program in Guatemala, with $34 million in funding, increases both the quality and quantity of factors of production. This raises the country's production possibilities frontier.

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    20240219Econ Paper 2 Practice

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    i) Economic growth refers to the potential increase in a country's GDP. Factors of production like capital and resources are managed to maximize profits. ii) In Guatemala, timber production causes a negative externality of deforestation that damages the environment. When marginal private costs (MPC) are greater than marginal social costs (MSC), there is a welfare loss. Only by decreasing production back to the point where MPC equals MSC will the externality be solved. iii) The "Feed the Future" program in Guatemala, with $34 million in funding, increases both the quality and quantity of factors of production. This raises the country's production possibilities frontier.

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    10 views2 pages

    20240219econ Paper 2 Practice

    Uploaded by

    CHAN KWOK KING G9G-01
    i) Economic growth refers to the potential increase in a country's GDP. Factors of production like capital and resources are managed to maximize profits. ii) In Guatemala, timber production causes a negative externality of deforestation that damages the environment. When marginal private costs (MPC) are greater than marginal social costs (MSC), there is a welfare loss. Only by decreasing production back to the point where MPC equals MSC will the externality be solved. iii) The "Feed the Future" program in Guatemala, with $34 million in funding, increases both the quality and quantity of factors of production. This raises the country's production possibilities frontier.

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    of 2

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