Microeconomics (Book Only)
12th Edition
ISBN: 9781285738307
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 2, Problem 4VQP
To determine
Scarcity,
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Assuming the PPF is shifting from PPFo to PPFn, which of the following explains the cause or causes of the economic growth depicted in this Figure?
a) This Figure represents growth due to an increase in resources and/or improvement in technology that are specific to the production of X.
b) This Figure represents growth due to an increase in resources and/or improvement in technology that are specific to the production of Y.
c) This Figure represents growth due to an increase in resources and/or improvement in technology that are not specific to either product.
d) This Figure represents growth due to an increase in specialization.
Using a production possibilities frontier (PPF) diagram, determine how does the PPF change in response to the events describe below.
a) A relaxation of policies allowing more foreign direct investment into the country. b) Increasing the minimum wage level. c) A decrease in expenditure on research and development. d) An increase in the retirement age. e) Government policies supporting the provision of services, without affecting manufacturing.
Accumulation of capital and change in technology bring economic growth, which means that the PPF keeps shifting outward: Production that was unattainable yesterday becomes attainable today; production that is unattainable today will become attainable tomorrow. Why doesn’t this process of economic growth mean that scarcity is being defeated and will one day be gone?
Chapter 2 Solutions
Microeconomics (Book Only)
Ch. 2.1 - Prob. 1STCh. 2.1 - Prob. 2STCh. 2.1 - Prob. 3STCh. 2.1 - Prob. 4STCh. 2 - Prob. 1VQPCh. 2 - Prob. 2VQPCh. 2 - Prob. 3VQPCh. 2 - Prob. 4VQPCh. 2 - Prob. 5VQPCh. 2 - Prob. 1QP
Ch. 2 - Prob. 2QPCh. 2 - Prob. 3QPCh. 2 - Prob. 4QPCh. 2 - Prob. 5QPCh. 2 - Prob. 6QPCh. 2 - Prob. 7QPCh. 2 - Prob. 8QPCh. 2 - Prob. 9QPCh. 2 - Prob. 10QPCh. 2 - Prob. 11QPCh. 2 - Prob. 12QPCh. 2 - Prob. 1WNGCh. 2 - Prob. 2WNGCh. 2 - Prob. 3WNGCh. 2 - Prob. 4WNGCh. 2 - Prob. 5WNGCh. 2 - Prob. 6WNGCh. 2 - Prob. 7WNGCh. 2 - Prob. 8WNGCh. 2 - Prob. 9WNG
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Using the graph below, use the production possibilities curve/ frontier PP1 curve to answer the question following the graph. Capital goods PPP Consumer goods Which point(s) on the above graph relative to PP1 curve, represent(s) maximum possible output and therefore productive technical efficiency? A B A, B, C Darrow_forwardExplain the following economics concepts with PPF. a)scarcity b)Economic inefficiency c)Economic growtharrow_forwardProvide a definition of “technological capability” and “social capability”, and describe the differences between themarrow_forward
- Explain the following economic concepts with a PPF a) Scarcity b) Economic Inefficiency c) Economic Growtharrow_forwardWhich of the following statements is incorrect regarding the PPF model? a. A decrease in resource availability would cause the PPF to shift in closer to the origin. b. Points that are currently outside of the PPF could be attainable with increased resource availability and/or improved technology. c. The points on the PPF where the curve touches the axes are clearly the best ones for the firm to produce. d. If the goods sector of an economy is being studied, the axes will be labeled consumer (or consumption) goods and capital goods. e. If an entire economy is being studied, the axes will be labeled goods and services.arrow_forwardApply the IPAT model to the example of China provided in the chapter. How do population, affluence, technology, and ecological sensitivity affect China’s environment? Now consider your own country or your own state. How do population, affluence, technology, and ecological sensitivity affect your environment? How can we minimize the environmental impacts of growth in the human population?arrow_forward
- Which of the following is a normative statement? Higher expenditures on health care will reduce infant mortality rates. To improve our economic security, we should reduce our dependence on oil imports. Increased defense spending will lead to higher budget deficits. International trade leads to expanded consumption opportunities.arrow_forwardWhat fundamental concept is behind the PPF model?arrow_forwardCountries with high per capita incomes are sometimes called affluent economies. Do these affluent economies face the problem of scarcity?arrow_forward
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