Specialization and production possibilities

Suppose Russia produces only camcorders and digital cameras. The resources that are used in the production of these two goods are not specialized�that is, the same set of resources is equally useful in producing both digital cameras and camcorders.

1.The shape of Russia�s production possibilities frontier (PPF) should reflect the fact that as Russia produces more digital cameras and fewer camcorders, the opportunity cost of producing each additional digital camera ( Decreases, Increases, remains constant) .

The monthly demand equation for an electric utility company is estimated to be p equals 60 minus left parenthesis 10 superscript negative 5 baseline right parenthesis x, where p is measured in dollars and x is measured in thousands of killowatt-hours. the utility has fixed costs of $3 comma 000 comma 000 per month and variable costs of $32 per 1000 kilowatt-hours of electricity generated, so the cost function is upper c left parenthesis x right parenthesis equals 3 times 10 superscript 6 baseline plus 32 x. (a) find the value of x and the corresponding price for 1000 kilowatt-hours that maximize the utility's profit. (b) suppose that the rising fuel costs increase the utility's variable costs from $32 to $38, so its new cost function is upper c 1 left parenthesis x right parenthesis equals 3 times 10 superscript 6 baseline plus 38 x. should the utility pass all this increase of $6 per thousand kilowatt-hours on to the consumers?