PPF₁ PPF₂ X A change in technology causes the production possibility frontier for this country to move from PPF₁ to PPF2. Based on this graph, identify whether each of the following would be true or false and briefly explain your reasoning. A. After the change in technology, bundles "A" and "B" would both be efficient in production. B. As a result of the change in technology, the opportunity cost of producing good X will increase and the opportunity cost of producing good Y will decrease relative to before the change in technology. C. If this country was initially producing bundle "C" on PPF₁, the technology change will allow this country to increase its production of both goods relative to what it was initially producing prior to the change in technology. D. Both PPF₁ and PPF2 are downward sloping. This indicates that the marginal cost of producing good X decreases as more of good X is produced.

PPF₁ PPF₂ X A change in technology causes the production possibility frontier for this country to move from PPF₁ to PPF2. Based on this graph, identify whether each of the following would be true or false and briefly explain your reasoning. A. After the change in technology, bundles "A" and "B" would both be efficient in production. B. As a result of the change in technology, the opportunity cost of producing good X will increase and the opportunity cost of producing good Y will decrease relative to before the change in technology. C. If this country was initially producing bundle "C" on PPF₁, the technology change will allow this country to increase its production of both goods relative to what it was initially producing prior to the change in technology. D. Both PPF₁ and PPF2 are downward sloping. This indicates that the marginal cost of producing good X decreases as more of good X is produced.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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