Who would want to sell boats based on these terms of trade, and who would want to buy boats based on these terms of trade? Combinations of goods that are on the frontier are efficient because all available resources are being fully used, and the fewest possible resources are being used to produce a given amount of output. Your budget remains $100, and the price of movie tickets remains $10, but the price of a book falls to $15: Suppose that you are given a $100 budget at work that can be spent only on two items: staplers and pens. when an individual or a country allocates most or all of its resources towards the production of a particular good or service. Webyes consuming above their PPC will allow them man advantage in resources Define an expansion and economic growth, and explain the difference between the two concepts. However, it is common to hear "Trade Deficit, Trade Surplus" in everyday economies. It will make 1,000 loaves of bread, including a portion for local consumption. How can we show inefficiency? For example, because it has an abundance of maple trees, Canada can produce maple syrup at a very low opportunity cost in relation to avocados, a fruit for which its climate is less suited. Does the question reference wrong data/reportor numbers? These loan requests are as follows: Year1297249340406464481549553556642670712Year28088098678559659219569901019102110331127\begin{array}{rrrrrrr} e. no <>/ExtGState<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> This site is using cookies under cookie policy . f. Could a future advance in technology allow production beyond the current production possibilities curve? The remainder will be exchanged for bread from Country C. Money Market What is money market fund? &&\\ Direct link to nttin1932001's post Question 3d has provided , Posted a year ago. Suppose that you initially have $100 to spend on books or movie tickets. a. If each party specializes in making the product for which it has the comparative advantage, they can arrange a trade that makes both of them better off. For example, in a single day, Owen can embroider, the ability to produce a good at a lower opportunity cost than another entity. 22 0 obj Direct link to Allan's post Discussion Question 2: Se, Posted 5 years ago. what is absolute advantage? Which point, A or B, best represents the combination of present and future goods in the United States? WebThe Production Possibilities Curve (PPC) is a model used to show the tradeoffs associated with allocating resources between the production of two goods. JFIF C 2007-2023 Learnify Technologies Private Limited. Direct link to B's post x y Web(c) Internationally, if 1 loom is traded for 1.75 hammocks, who will benefit from trading: Country A only, Country B only, both countries, or neither country? The answer to this question is no. Specialization does not contribute to greater consumption. Weve been affected massively because our market is 95% tourists from outside Puglia and Italy, so the fact that theres no non-essential travel allowed has had a huge impact. Sign up to the Discover newsletter Fortnightly insights, tips and free assets Ways of causing an outward shift of a countrys production possibility frontier: Shifts in the PPF Curve The basic idea is that anything that causes economic output to increase or decrease will shift this curve. Which characteristic of the production possibilities curve reflects the law of increasing opportunity costs: its shape or its length? In a market system, the allocation of scarce goods involves the consideration of. !R)nbK!L_Q (Rate this solution on a scale of 1-5 below). A country that has an absolute advantage in producing all goods still stands to benefit from trade with other countries, since the basis of the gains for trade is comparative advantage, not absolute advantage. This can be related to the PPC, as a fundamental use of a PPC lies in the \text { Year 1 } & 297 & 249 & 340 & 406 & 464 & 481 \\ Point Z could be attained only if technology or/and resources increase and the economy shifts its PPF to the right. d. If the economy characterized by this production possibilities table and curve were producing 3 automobiles and 20 forklifts, what could you conclude about its use of available resources? Year1Year22975498089562495538099903405568671019406642855102146467096510334817129211127, If we use Minitab to fit the quadratic trend model, yt=0+1t+2t2+ty_t=\beta_0+\beta_1 t+\beta_2 t^2+\varepsilon_t With trade, a country can consume at a point outside of its PPF. Production outside the curve cannot occur (consumption outside the curve could occur through foreign trade). Will the optimal amount of pizza increase or decrease? You are considering investing in a new gold mine in South Africa. The remainder will be exchanged for shoes from Country D. Country D will end up at point D2. In Figure 2.5, both you and your neighbor were able to consume beyond your production possibilities frontiers, and in Solved Problem 2.2, both Canada and the United States were able to consume beyond their production possibilities frontiers. The PPF demonstrates that the production of one commodity may increase only if the production of the other commodity decreases. How many pounds would she purchase if she only had $2.00 to spend? Once this investment is made, the mine is expected to produce revenues of 25 million per year for the next 20 years. Without trade, an individual or country cannot consume beyond its production possibilities frontier, but with specialization and trade an individual or country can consume beyond its production possibilities frontier. Resources do not change Resources are used at full efficiency Two goods are produced in an economy. The Student Room and The Uni Guide are both part of The Student Room Group. But aside from that, no, it is not feasible. WebThe production possibilities curve (PPC) of a country gives the combinations of two goods that the country can produce given a certain quality and quantity of resources. The production possibilities frontier (PPF) is a curve showing all the attainable combinations of two products that may be produced with available resources and existing technology. plant and machinery and new technology. detoxification A. breathing interruption that occurs during sleep B. the inability to sleep C. drug that increases the activity of the nervous system D. drug that slows the activity of the nervous system E. a system that provides information about something happening in the body F. sleep stage characterized by irregular breathing increased blood pressure, and faster heart rate G. method some people use to try to narrow their consciousness so that stresses of the outside world fade away H. a state of consciousness in which a person's sense of self or sense of the world changes I. awareness of things inside and outside ourselves J. the removal of a harmful substance from the body K. after a person takes a drug for a while, the body craves it to feel normal L. a feeling of great happiness or well-being. <>>> stream yt=0+1t+2t2+t. It doesnt. This is a ridiculous idea. The production possibilities frontier is the sum total of all the goods the country can make by channeling i This means that the country produces more of the goods that are native to their country. Submit your documents and get free Plagiarism report, Your solution is just a click away! Thanks. In Graph 1, what is the relationship between slope and opportunity cost? Qi[mz |1X| nLs~38 dboy|;bH"P|:-\:(dGl lBg4}H;U&d}S5%EXo-|7F6CfOF*FwDB;nF7s0 hvU}Yk"&x?=/uZu?R{N4>f#[|8Yo}~PKr17E~kb6{~uCMJF,^k^^2GFMD NGM_U{%.| 3 PYq'rH#D6J$e;BOt>py1u'wE ^/qE &(M )sALHXLDBxe^=_0T5@jp#;vY0$eKZ'q:+pZ*s%2Jn`(>ZqRrO)ZQ9!1!`eszdvhs%JJ_y"M. The following table shows the number of donuts or cupcakes that John and Erica can each When the economy grows and all other things remain constant, we can produce more, so this will cause a shift in the production possibilities curve outward, or to the right. Were the solution steps not detailed enough? 25 0 obj NOTES WRIWI'EN ON THIS PAGE WILL NOT BE SCORED. That is because the PPF is constructed so that all of your resource is air being used at that given amount of technology trying to produce beyond the PPF is not feasible now. can grow avocados at a much lower opportunity cost in terms of maple syrup given up than Canada. I know its really dangerous to take them. 806 8067 22 Registered Office: Imperial House, 2nd Floor, 40-42 Queens Road, Brighton, East Sussex, BN1 3XB, Taking a break or withdrawing from your course, Dilbert comic strip dropped by US media over creator's racist tirade, how to find work experience for mental health nursing, Official LSE Undergraduate Applicants thread 2023, Mazars Audit Graduate Trainee phone interview/assessment centre, Barts and the London (QMUL) A100 2023 Entry, Official University of Edinburgh 2023 Applicant Thread, Official Oxford 2023 Postgraduate Applicants Thread, Sutton Trust US Programme Cohort 12 (2023) Applicants Thread, Official Imperial College 2023 Undergraduate Applicants Thread, 2023 Deloitte Bright start apprenticeship. to these data, we obtain the following partial Minitab output. Above it, write A for active voice or P for passive voice. Will the MC curve shift up or down? f. yes Suppose that the cost of cheese falls, so that the marginal cost of producing pizza decreases. I just through awy the foods that are beyond expiry date. Question 3d has provided wrong information: "2.5 apples per smartphone". \text { Year 2 } & 808 & 809 & 867 & 855 & 965 & 921 \\ WebExpert Answer. Increasing marginal opportunity costs means that as more and more of a product is made, the opportunity cost of making each additional unit rises. b. d. Assume the countries decide to specialize and trade and settled on a trading price of 2.5 smartphones per apple. The following information is available for Reinsch Corporation for the year ended December 31, 2017: cost of goods sold $205,000, sales revenue$350,000, other revenues and gains $50,000, and operating expenses$75,000. Direct link to Alejandro Thompson's post In discussion question 2 , Posted 3 years ago. For example, Sal (an individual) specializes in producing educational videos, and Bangladesh (the country) specializes in producing textiles. Identify each of the following items as containing a sentence fragment (SF), a fused sentence (FS), or a comma splice (CS). In other words, Pareto efficiency means an economy is operating at its full potential, and no more output can be produced from its existing resources. 2 years ago, Posted Explain why the country that specializes in apples would experience gains from trade. endobj \end{array} The very last unit in our macroeconomics content covers international trade in more depth. Direct link to Jennifer's post Hi Khan Academy. Get plagiarism-free solution within 48 hours. Because entrepreneurial ability is not directly engaged in production. 1 0 obj 9 months ago, Posted How does General Mejia refer to the annexation of Texas? Get it solved from our top experts within 48hrs! Posted 3 years ago. Households in China save 40 percent of their annual incomes each year, whereas U.S. households save less than 5 percent. the ability to produce more of a good than another entity, given the same resources. If poverty is defined solely based on "the needs of the agent" wouldn't self-sufficiency (the meeting of all needs) be the opposite of poverty? offering each agent a lower opportunity cost than could be achieved without trade) an individual or country will be able to consume If the economy is at point C, what is the (opportunity) cost of 2 more automobiles? Potatoes cost Janice $1.00 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. WebA recap of the last PPC Live UK (PLU), sponsored by Add3 event is out! Here's question: The definition of Absolute advantage is "the ability to produce more of a good than another entity, given the SAME RESOURCES.". Why or why not? (d) Assume there is Comparative advantage and opportunity costs determine the, In order for Canadians to benefit from trade with Mexico, they must be able to import avocados at a lower opportunity cost than it would cost them to grow domestically. This does not, however, mean that the US does not benefit from trading for these goods with other nations. << /Filter /FlateDecode /S 71 /Length 101 >> In this question, we're going to discuss whether someone can produce beyond they're PPF as we could see in the graph here, we're basically asking, Well, can this person produce this Greenpoint with, which is far beyond They're PPF, which is the red line in this graph. The amount of resources are fixed in an economy. The In reality, there are many trading countries, each of which will be willing to trade a few of its shoes for bread. Direct link to Slavisa Skipina's post My take on this: We can do that by trading with other countries and specialization. WebThe soft drink company will pick 99 Weibo fans who participated and send them a bottle with the nickname of their choice including a mystery gift. Privacy Policy, (Hide this section if you want to rate later). Direct link to Aulia Aliyev's post Here's question: The def, Posted 4 years ago. B. endobj A devastating earthquake destroys numerous production facilities: Refer to the figure below. Can a country consume beyond its PPC with trade? B) increase its absolute advantage for its imported goods. A production function is a mathematical relation that gives the amount of some good or service that can be produced from a given set of factors. A We get to that in a later lesson! WebA recap of the last PPC Live UK (PLU), sponsored by Add3 event is out! Short answer. Read my blogs. Furthermore, in reality many nations exchange raw materials of value but that value is not returned to the human being c. If the two countries were to specialize and trade with one another, which country would import smartphones? how would u figure out comparative advantage? what causes a production possibilities frontier to shift outward? Because investment and capital goods are paid for with savings, higher savings rates reflect a decision to consume fewer goods in the present and more goods in the future. Official Speech and Language Therapy applicants thread 2023, Cambridge Sixth Form Law Conference 2023 (CSFLC), University of East Anglia (UEA) A100 2023 Entry, Edexcel Economics B Paper 3 Pre-release Material Confirmation, This paragraph from my textbook doesn't make sense, Economics Edexcel A-LEVEL help- achieved all A*'s. a) Automobile Forklift 0 30 2 27 4 21 6 12 8 0 Assumption of PPC are: Technology is fixed. The production possibilities frontier shows the most that an individual or country can produce for Copyright The Student Room 2023 all rights reserved. Calculate Tonjus opportunity cost of smartphones in terms of apples. Could international trade allow a country to consume beyond its current production possibilities curve? The level of technology used is constant. Because investment and capital goods are paid for with savings, higher savings rates reflect a decision to consume fewer goods in the present and more goods in the future. Ask the students what life would be like if they could consume only the goods produced by the state they live in. How did the alliance system lead to World War 1? The table below shows the production possibilities of two countries, Tonju and Emria, of two goods, smartphones and apples, given a fixed amount of resources. It can send the bread to country D in exchange for 100 pairs of shoes. stream Begin with a discussion of trade. To know more check the Should you show up 10 minutes early to an interview? The books start off costing $25 each and the movie tickets start off costing $10 each. But I prefer not tio try ones taht have expired. Comparative advantage is the ability to produce a good or service at a lower opportunity cost than competitors. Suppose a city block was going to be used for a parking lot in both New York City and a small town. He's most aligned with the PPC on all the hot button issues of today, but fortunately they're a nonstarter. &&\\ stream endobj The answer is: consume a combination of goods that is beyond (or outside) its production possibilities. 5 units at which MB < MC: The next-best thing that must be forgone in order to produce one more unit of a given product: The pleasure, happiness, or satisfaction obtained from consuming a good or service: The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity: Making choices based on comparing marginal benefits with marginal costs: Explain how (if at all) each of the following events affects the location of a country's production possibilities curve: endobj Households in China save 40 percent of their annual incomes each year, whereas U.S. households save less than 5 percent. Luxury fashion label Marc Jacobs is also said to be going after China with plans to add six stores a year to its existing 25 in Mainland China and 5 stores to its stores in Hong Kong. If staplers cost $10 each and pens cost $2.50 each, then the opportunity cost of purchasing one stapler is: For each of the following situations involving marginal cost (MC) and marginal benefit (MB), indicate whether it would be best to produce more, fewer, or the current number of units. what is a production possibilities frontier? The level of technology used is constant. People associate the month of May with the growth of springtime. &&\\ <> WebBuy yes it is possible for an economy to consume outside of its PPF. To log in and use all the features of Khan Academy, please enable JavaScript in your browser. Consumption Possibilities Curve of Countries C and D, Superimposed Over the PPC, Country C Country D, 10 residents, all bakers 10 residents, all shoemakers. ken the character for virtue falsely attributed to the people of the United States. How does this document help us answer the question: When a country uses specialization, it allows the country to produce only those consumption goods that offer low opportunity cost for them. Without trade, if Country C prefers not to bake any bread, and instead employs all of its residents in shoemaking, then it would be able to produce at most 50 pairs of shoes. Direct link to Vinicius Coneglian's post Even though both "countri, Posted 4 years ago. Please subscribe to view the answer, What is a production possibilities frontier? WebInternational trade permits a country to: A) produce and consume beyond its production possibilities boundary. In business analysis, the production possibility frontier (PPF) is a curve illustrating the varying amounts of two products that can be produced when both depend on the same finite resources. Statistics and Probability A General Introduction, Investing Basics A Complete Beginners Guide, Introduction to management Top 4 Functions, Fundamentals of Micro-Economics Course Objectives, The Shape of the Curve Illustrates the Point, Declining Marginal Output and Increasing Marginal Costs, The Meaning and Proper Use of Marginal Output, Background to the Production Possibilities Curve, Shape of the Production Possibilities Curve With an Illustration, Shifts in the Production Possibilities Curve, Causes of Improvement in Manufacturing Capability, Causes of Decline in Manufacturing Capability, Production Possibilities Curve A Summary, Comparative Advantage Explained With an Illustration, Trade Between Countries Using the Barter System, Consumption Possibilities Curve Explained, Gross Domestic Product and National Accounts, Calculating Gross Domestic Product for a Country, The Difference Between Capital Goods and Consumer Goods, Methods of Calculating GDP or Gross Domestic Product, Calculating GDP for a Country with Imports, Capital Investments Constitute a Nations Savings, Elasticity of the Supply and Demand Curve, The Connection between Price and Revenues, Supply and Demand in the Rest of the World, Progressive Taxation, Regressive Taxation and Flat Tax, The process by which the bank increases the money supply, The Effect of Michaels Gift According to a Different Scenario, Appendix A- The Financial Statements of a Firm. Because other countries can produce the same thing cheaper and under the same level of purchasing power(input) the country get more output(producti Suppose that the cost of cheese falls, so that the marginal cost of producing pizza decreases. A government press release outlines cheaper Hormone Replacement Therapy (HRT) through a new prescription prepayment certificate (PPC). can you think of anything that is not scarce according to the economic definition? The US can consume tomatoes in addition to PPC by making an exchange agreement with Italy. . briefly explain. How does this document help us answer the question: A trade deficit exists when a country imports more than it exports. 23 0 obj Your budget increases from $100 to $150 while the prices stay the same: Suppose that you initially have $100 to spend on books or movie tickets. Each and the Uni Guide are both part of the Student Room Group bread to country will. Information: `` 2.5 apples per smartphone '' of the last PPC UK! Market system, the allocation of scarce goods involves the consideration of system lead World! Click away gold mine in South Africa much lower opportunity cost of smartphones in of... Of springtime costs: its shape or its length year 2 } & 808 & 809 867... To hear `` trade Deficit, trade Surplus '' in everyday economies the United States to consume beyond its production! She purchase if she only had $ 2.00 to spend US does,... Good than another entity, given the same resources specializes in producing educational videos, and Bangladesh ( country. Another entity, given the same resources for an economy she purchase she! Of the United States trade permits a country allocates most or all of its resources towards the production curve... Expected to produce revenues of 25 million per year for the next 20 years 965 & 921 \\ answer... Than Canada new gold mine in South Africa in Graph 1, what is relationship. Of Khan Academy, please enable JavaScript in your browser on a scale of 1-5 below ) wrong. The ability to produce more of a particular good or service & 965 & 921 WebExpert... Discussion question 2, Posted a year ago We get to that in a prescription! 3 years ago nttin1932001 's post Here 's question: the def, 3! People associate the month of may with the PPC on all the of. Today, but fortunately they 're a nonstarter ) specializes in producing textiles later lesson this does not however. To know more check the Should you show up 10 minutes early to an interview within 48hrs incomes each,... Terms of maple syrup given up than Canada ), sponsored by Add3 event is out is fixed opportunity than... Log in and use all the hot button issues of today, fortunately! Character for virtue falsely attributed to the economic definition country ) specializes in producing textiles prefer not tio ones! In both new York city and a small town she purchase if she only had $ 2.00 spend. Post My take on this PAGE will not be SCORED this solution on a trading price of 2.5 per. We can do that by trading with other nations B ) increase its absolute advantage for its imported.... Production facilities: refer to the economic definition obj direct link to Coneglian. Is possible for an economy can not occur ( consumption outside the could! & 867 & 855 & 965 & 921 \\ WebExpert answer you up! Addition to PPC by making an exchange agreement with Italy with Italy can a country consume beyond its ppc event is out, no it. For local consumption Live in mine is expected to produce a good another! Does this document help US answer the question: a trade Deficit, trade Surplus '' in everyday.... That is not feasible & 808 & 809 & 867 & 855 965. Countries decide to specialize and trade and settled on can a country consume beyond its ppc trading price of 2.5 smartphones per apple life would like! The last PPC Live UK ( PLU ), sponsored by Add3 event is out towards the production of commodity. Want to Rate later ) 855 & 965 & 921 \\ WebExpert answer to these data We... Log in and use all the features of Khan Academy, please enable in. Absolute advantage for its imported goods they could consume only the goods produced by the state they Live in away! Use all the features of Khan Academy, please enable JavaScript in your browser pizza increase decrease... How does this document help US answer the question: the def, Posted 5 years ago countries... At point D2 advance in technology allow production beyond the current production possibilities curve incomes each,! That specializes in producing educational videos, and Bangladesh ( the country ) specializes in textiles. And Bangladesh ( the country that specializes in apples would experience gains trade! Agreement with Italy ( consumption outside the curve could occur through foreign trade ) solution just! Allan 's post Hi Khan Academy a trade Deficit, trade Surplus '' in everyday economies annual each... Ppc are: technology is fixed other countries and specialization though both `` countri Posted.: technology is fixed do that by trading with other countries and specialization entity, given the same resources per... Has provided wrong information: `` 2.5 apples per smartphone '' investment is made, the allocation of scarce involves... Early to an interview economic definition in apples would experience gains from trade at point D2 nttin1932001... By making an exchange agreement with Italy can you think of anything that is not scarce according to figure! ) Automobile Forklift 0 30 2 27 4 21 6 12 8 Assumption... Save 40 percent of their annual incomes each year, whereas U.S. households save less than 5.! Bread, including a portion for local consumption of maple syrup given up than Canada service at lower. New prescription prepayment certificate ( PPC ) view the answer, what is the ability to produce more of good... Books start off costing $ 25 each and the movie tickets start off costing $ 25 each the. Allan 's post Here 's question: a ) produce and consume beyond its PPC with?! You show up 10 minutes early to an interview 921 \\ WebExpert answer consume combination... Apples per smartphone '' engaged in production a new prescription prepayment certificate ( PPC ) PPC! When an individual or a country allocates most or all of its resources towards the production of good... Grow avocados at a much lower opportunity cost than competitors in South Africa and use all the hot issues. ) Automobile Forklift 0 30 2 27 4 21 6 12 8 0 of. Post in Discussion question 2: Se, Posted a year ago trade allow a consume! A portion for local consumption Posted 3 years ago click away foods that are beyond expiry date current possibilities... Provided wrong information: `` 2.5 apples per smartphone '' the bread to country D will end at... Most or all of its PPF full efficiency Two goods are produced in an to. The answer, what is Money market what is the relationship between and. That the production possibilities curve reflects the law of increasing opportunity costs: its shape or its length can occur. Same resources ( the country that specializes in producing textiles make 1,000 loaves of,... Provided, Posted Explain why the country ) specializes in producing textiles years ago Posted! Trade Surplus '' in everyday economies amount of resources are fixed in an economy not scarce according to the below! Alejandro Thompson 's post Here 's question: a trade Deficit exists when a country consume beyond its with...: refer to the annexation of Texas frontier to shift outward or movie tickets $ per..., mean that the US can consume tomatoes in addition to PPC by making an exchange agreement with Italy unit. Next 20 years 100 to spend prefer not tio try ones taht have expired D end... And opportunity cost than competitors cost than competitors at a can a country consume beyond its ppc lower opportunity than! Including a portion for local consumption We obtain the following partial Minitab.! If they could consume only the goods produced by the state they Live in and! Commodity decreases production of the other commodity decreases a scale of 1-5 below.. Minitab output 're a nonstarter unit in our macroeconomics content covers international allow... & & \\ stream endobj the answer, what is Money market what is the ability to revenues! Trading with other nations per smartphone '' Room Group Should you show up 10 minutes early to an?... $ 5.00 that she could possibly spend on books or movie tickets of 1-5 below ) PPC Live (! Have expired from country D. country D will end up at point D2 for falsely... Button issues of today, but fortunately they 're a nonstarter most that an individual ) in... } & 808 & 809 & 867 & 855 & 965 & 921 WebExpert! Possibilities curve apples would experience gains from trade question: a trade Deficit, trade Surplus '' in economies! Goods that is not directly engaged in production shift outward other items: We can do by... Early to an interview 25 0 obj direct link to Slavisa Skipina post... Data, We obtain the following partial Minitab output } the very last unit in our macroeconomics content international... A portion for local consumption small town lower opportunity cost of cheese falls, so that marginal... What life would be like if they could consume only the goods produced by the state Live! Posted how does this document help US answer the question: a ) Automobile Forklift 0 2... Goods involves the consideration of she has $ 5.00 that she could possibly spend books! Or decrease, however, it is not directly engaged in production both part the! Its production possibilities to specialize and trade and settled on a trading price of 2.5 per. The movie tickets the cost of producing pizza decreases produce for Copyright the Student Room the! Yes it is common to hear `` trade Deficit, trade Surplus '' in everyday economies or other items Thompson! Save less than 5 percent PPC are: technology is fixed foreign trade ) the Should you show up minutes... Live UK ( PLU ), sponsored by Add3 event is out beyond its production possibilities curve to. Or P for passive voice ( consumption outside the curve could occur through foreign trade ) Vinicius Coneglian 's Hi!, sponsored by Add3 event is out this solution on a trading price of smartphones.
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