At A, where almost all resources are being used to produce education, an added 20 units of housing can be produced by giving up fewer than 5 units of education. At C, to produce another 20 units of housing 23 units of education must be given up. The opportunity cost of housing in terms of education is about 5 times greater at C than at A.

   At A almost everyone is teaching, even skilled carpenters. If we want more housing it makes sense to take carpenters out of education first, however moving from C to D probably means using skilled teachers as builders.

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