Question

Choose appropriate answer: In a hypothetical economy that produces two goods, there is an improvement in...

Choose appropriate answer:

In a hypothetical economy that produces two goods, there is an improvement in the production of one of the goods. This will be illustrated by…
a) A point on the PPF diagram
b) An outward swivel of the PPF diagram
c) An outward shift of the PPF diagram
d) An inward shift of the PPF diagram

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

PPF shows the combinations of 2 goods possible to produce with a given level of resources. But if the technology for one good is improved and this results in production of higher units of that good with the same amount of resources but no such improvement has occurred in the production of the other good then, the PPF will pivot or swivel outward. So option b is correct

It shifts parallely when the technology for both the goods improves and inwards if it deteriorates. So option c and d are incorrect.

A point on the same PPF doesn't imply any improvement, it only states the possible combination with the given level of resources, so option a is incorrect

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In a hypothetical economy that produces two goods, there is an improvement in the production of...
In a hypothetical economy that produces two goods, there is an improvement in the production of one of the goods. This will be illustrated by… a) A point on the PPF diagram b) An outward swivel of the PPF diagram c) An outward shift of the PPF diagram d) An inward shift of the PPF diagram
Suppose an economy produces only two goods: Spanish ham and kugel. The production possibility frontier (PPF)...
Suppose an economy produces only two goods: Spanish ham and kugel. The production possibility frontier (PPF) is a downward-sloping straight line. Then, a)   The opportunity cost of producing one more Spanish ham is constant b)   The opportunity cost of producing one more Spanish ham is increasing c)   The opportunity cost of producing one more Spanish ham is always zero d)   None of the above
a) Draw a diagram, which shows the production possibility curve for a country, which produces capital...
a) Draw a diagram, which shows the production possibility curve for a country, which produces capital and consumer goods. b) On this diagram show: i. A point at which the economy is operating productively efficient, ii. A point which is unobtainable for the economy given its resources and level of technology, iii. A point at which the economy is operating inefficiently. c) Briefly explain what happens to the PPF if there is an earthquake in the country. d) Briefly explain...
1. Consider an economy that tries to achieve higher economic growth over time by encouraging production...
1. Consider an economy that tries to achieve higher economic growth over time by encouraging production activities without paying any attention to the environmental quality. Assume that the resources and technology used in the economy stay the same. Show, using a well labeled diagram with appropriate production possibility frontier/s and indifference curve/s, how the economy might move over time. 2.Why is sustainability not likely to be attainable if an economy's PPF doesn't shift outward? Explain in one or two sentences.
Before the Covid crisis, economists considered that the US economy was at “full employment.” Assuming that...
Before the Covid crisis, economists considered that the US economy was at “full employment.” Assuming that the crisis did not affect the US economy’s total capacity to produce, the current situation would be best represented by: A) the PPF shifting inward (closer to the origin) B) the PPF shifting outward (further from the origin) C) a point on the PPF located on the opposite side of the pre-Covid point D) a point outside the PPF E) a point inside the...
Consider the following production possibilities frontier model for an economy that produces only two goods: alfalfa...
Consider the following production possibilities frontier model for an economy that produces only two goods: alfalfa and smartphones. 020406080100100806040200SMARTPHONES (Millions)ALFALFA (Millions of bushels)PPF Which of the following is true regarding this economic model? In order to construct such a model, an economist would need real life data regarding countries that only produce two goods. The fact that there are only two goods produced in this theoretical economy, when, in reality, economies produce many more types of goods, means this model...
Suppose the prices of goods X and Y both double, while the consumer's income is unchanged....
Suppose the prices of goods X and Y both double, while the consumer's income is unchanged. This will cause the consumer's budget constraint to: Select one: a. shift inward in a parallel fashion b. shift inward and become flatter c. shift inward and become steeper d. shift outward in a parallel fashion
A consumer has 100 dollars to spend on two goods, price of a sweater is $...
A consumer has 100 dollars to spend on two goods, price of a sweater is $ 10 and price of shoes is $ 20. Assume the consumer’s budget line has shoes on the vertical axis and sweaters on the horizontal axis; Determine the slope of the budget line _____ (give your answer in decimals) What is the vertical intercept of the budget line?________ What will be the effect of an increase of income on the budget line______ (use one of...
The production possibilities frontier (PPF) illustrates the combinations of goods that society can consume when trading...
The production possibilities frontier (PPF) illustrates the combinations of goods that society can consume when trading with other producers. True False When it is said that trade between nations can make both sides of the trade better off, this means that all citizens in each nation will benefit. True False A production possibilities frontier (PPF) is characterized by increasing opportunity costs when a. ​the PPF is bowed outward b. ​the PPF is a straight line c. ​increasing opportunity costs do...
7. Country A produces fewer capital goods and more consumer goods than Country B (meaning, Country...
7. Country A produces fewer capital goods and more consumer goods than Country B (meaning, Country B produces more capital goods and fewer consumer goods). Which country’s economy will have more rapid growth? Draw two production possibilities curves to demonstrate your answer. 8. Imagine a production possibilities curve between Blu-ray players and Dolby speakers. How is the PPF affected when a technological breakthrough increases the efficiency of the production of Dolby speakers?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT