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vlademirsimon vlademirsimon
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A year ago

The diagram below shows two production possibilities boundaries for Country X.

Short description: A graph plots consumer goods against capital goods. Long description: The horizontal axis represents consumer goods. The vertical axis represents capital goods. The graph plots two concave down decreasing curves. The first curve, P P B subscript 1 begins at a point on the vertical axis, passes through the points, F, A, and B, and ends at a point on the horizontal axis. The second curve, P P B subscript 2 begins at a point on the vertical axis (above the point where the first curve begins), passes through a point, E, and ends at a point on the horizontal axis (to the right of the first curve). The point, C lies near the horizontal axis and parallel to A. The point, D is to the right of point E.

FIGURE 1-4

Refer to Figure 1-4. A shift of the production possibilities boundary from PPB1 to PPB2 implies



▸ a movement from full employment to some unemployment.

▸ that productive capacity in the consumer goods industry has improved.

▸ that productive capacity in the capital goods industries has improved.

▸ an inevitable decrease in total output.

▸ that if point E is the new choice of outputs, productivity has increased in the consumer goods industry.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
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alpha987alpha987
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A year ago
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vlademirsimon Author
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A year ago
Thanks for your help!!
kobbhy
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Yesterday
Thanks
Mcb
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2 hours ago
Good timing, thanks!
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