**Step 2: Drawing a Modified Production Possibility Frontier (PPF)**1. **Initial Setup:** - Create a new graph featuring the Production Possibility Frontier (PPF) of the economy. Ensure that the axes are properly labeled. Typically, the x-axis and y-axis will denote the quantities of two different goods produced by the economy.2. **Highlighting Technological Change:** - Use a different colored pen, pencil, or highlighter to illustrate how the PPF shifts when there is a technological advancement that specifically enhances the production of batteries. 3. **Understanding the Shift:** - A technological improvement in battery production implies that the economy can produce more batteries without reducing the production of blueberries. Hence, the part of the PPF related to batteries will shift outward. - Remember, the intercept for blueberries will remain unchanged, indicating that their production capacity is unaffected by this technological change.4. **Labeling:** - Clearly label the new PPF to distinguish it from the original one. This helps in visualizing how technology affects production possibilities.This step-by-step guide facilitates understanding how specific technological advancements can impact the economy's production capabilities, depicted through shifts in the PPF.

The production possibility frontier represents the total production of the goods and services in an economy at given resources. When any changes in the resources and technology occur then PPF shifts accordingly. AB represents the PPF where the E point shows the efficient point, the C point shows the inefficient point, D point represents the unattainable point. When technology changes and increases the production of batteries only there is no change in the blueberries. AB1 represents the new PPF which shows that due to technological advancement production of the batteries has increased.

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Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF.

Step 2. Draw another PPF of the economy with the axes labeled. Grab another color pen/pencil/highlighter and show how the PPF would change if there was a technological change that increased the production of batteries only. (Hint: The intercept for blueberries will not change.) Clearly label the new PPF.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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