QUESTION 4: Use production possibilities curves to illustrate each of the following (putting goods on the vertical axis and services on the horizontal axis): a) A shift in production from services towards goods. b) An increase in the potential output of the economy due to a greater availability of factors of production. c) An increase in productivity in the services sector. d) A decrease in productivity in the goods sector.
Added by Paul H.
Close
Step 1
The PPC before the shift will show a higher quantity of services and a lower quantity of goods, while the PPC after the shift will show a higher quantity of goods and a lower quantity of services. This shift can occur due to various reasons, such as changes in Show more…
Show all steps
Your feedback will help us improve your experience
Crystal Wang and 61 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
1. Points that are on a production possibilities curve (not above the curve and not below the curve) are which of the following? (A) Price ceilings only (B) Price floors only (C) Price ceilings or price floors (D) Efficient only (E) Possible only (F) Efficient and possible (G) Neither efficient nor possible 2. As trade becomes __________ common (frequent), specialization __________, which will increase productivity. (A) more; increases (B) more; decreases (C) less; increases (D) less; decreases
Andrew D.
On a production possibilities curve, the opportunity cost of good $X$ in terms of good $Y$ is represented by a. the distance to the curve from the vertical axis. b. the distance to the curve from the horizontal axis. c. the movement along the curve. d. all of the above.
Narayan H.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD