**Economic Growth Analysis****Question:**Based on Figure 3, choose the right statement.1. Growth in output is protrade because the cloth output increased and corn output decreased, and growth in consumption is protrade because consumption of corn increased more than that of cloth.2. Growth in output is not protrade because the cloth output increased and corn output decreased, and growth in consumption is protrade because consumption of corn increased more than that of cloth.3. Growth in output is protrade because the cloth output increased and corn output decreased, and growth in consumption is not protrade because consumption of cloth increased more than that of corn.4. Growth in output is protrade because the cloth output increased and corn output decreased, and growth in consumption is not protrade because consumption of corn increased more than that of cloth._Answer Key:_- The correct statement is (4) Growth in output is protrade because the cloth output increased and corn output decreased, and growth in consumption is not protrade because consumption of corn increased more than that of cloth.**Detailed Explanation of Figure 3: Economic Growth****Graph Description:**The graph in Figure 3 illustrates the relationship between the production and consumption of corn and cloth, with each good measured along one of the graph's axes:- X-axis: Cloth (in yards)- Y-axis: Corn (in tons)**Graph Components:**- **Initial Production Possibility Frontier (PPF)**: Represented by the curve PB_1, this line indicates the initial capabilities of an economy in terms of the maximum combinations of cloth and corn it can produce.- **New Production Possibility Frontier (PPF)**: Indicated by the curve W_1Z, this line suggests a shift in the economy’s production capabilities—specifically, an increase in cloth output and decrease in corn output.- **Indifference Curves**: Two indifference curves illustrate consumption preferences: - P_M: the initial consumption before economic growth - M: the consumption after the economic growth**Interpretation:**- As indicated, the shift from PB_1 to W_1Z demonstrates that the economy can now produce more cloth but less corn compared to its previous capabilities.- The shift in indifference curves from PM to M shows consumption changes where the consumption of corn increased more compared to that of cloth.This graph provides valuable insights into how an economy's growth can affect the production of different commodities and

Protrade output growth refers to an increase in the production or output of goods and services that…

Based on Figure 3, choose the right statement. 1) Growth in output is protrade because the cloth output increased and corn output decreased, and growth in consumption is protrade because consumption of corn increased more than that of cloth. 2) Growth in output is not protrade because the cloth output increased and corn output decreased, and growth in consumption is protrade because consumption of corn increased more than that of cloth. 3) Growth in output is protrade because the cloth output increased and corn output decreased, and growth in consumption is protrade because consumption of cloth increased more than that of corn. Growth in output is protrade because the cloth output increased and corn 4) output decreased, and growth in consumption is not protrade because consumption of corn increased more than that of cloth. Figure 3. Economic growth Com (Tom) 80 70 20 10 A 30 111 E VII Z 120 PB-1 PM-PB-1 M 250 Cloth (Yards)

Based on Figure 3, choose the right statement. 1) Growth in output is protrade because the cloth output increased and corn output decreased, and growth in consumption is protrade because consumption of corn increased more than that of cloth. 2) Growth in output is not protrade because the cloth output increased and corn output decreased, and growth in consumption is protrade because consumption of corn increased more than that of cloth. 3) Growth in output is protrade because the cloth output increased and corn output decreased, and growth in consumption is protrade because consumption of cloth increased more than that of corn. Growth in output is protrade because the cloth output increased and corn 4) output decreased, and growth in consumption is not protrade because consumption of corn increased more than that of cloth. Figure 3. Economic growth Com (Tom) 80 70 20 10 A 30 111 E VII Z 120 PB-1 PM-PB-1 M 250 Cloth (Yards)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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