Question

In a nation with excessive population growth, and unskilled labor, the production possibilities curve tends to:...

In a nation with excessive population growth, and unskilled labor, the production possibilities curve tends to:

a. Reach the unattainable point.

b. Increase and then decrease.

c. Remain unchanged.

d. Shift to a point on the graph which reflects growth.

e. Increase at a decreasing rate.

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Homework Answers

Answer #2

Since the production possibility can be defined as a line which is summation of different combinations of two different goods which can be produced with the available resources by using it efficiently. If the technology improves or resources increase, then the PPF shifts outwards.

Since in the given nation with excessive population growth, and unskilled labor, the production possibilities curve tends to  Shift to a point on the graph which reflects growth. This is because the population is excessive, so in near future both skilled and unkilled labor will increase. This leads to economic growth and PPF curve shifts outward from PPF1 to PPF2.

All this have been shown in the below diagram.

answered by: anonymous
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