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Essay text:
How does the reduction in benefits associated with higher earnings affect people’s incentive to work past age 65?
The people’s incentive to work past age 65 will be decreased because the income after tax is reduced when they work past age 65.
2. Imagine a society that produces military goods and consumer goods, which we’ll call “guns” and “butter.”
A. Draw a production possibilities frontier for guns and butter. Using the concept of opportunity cost, explain why it most likely has a bowed-out shape
The PPF graph is bow-shaped because of different resources with varying opportunity costs...
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